Neil Gandal

• PhD
• Head of Department at Tel Aviv University

In this paper, we examine U.S. COVID-19 deaths by day of the week during the first few months of the pandemic. Using data from the two large US. States (Florida and Texas) that report deaths by “day of actual death,” and controlling for time trends, we show that deaths during the Monday to Friday period (the week) were 7-8 percent higher than the w...

We first provide background on the “nuts and bolts” of a bug bounty platform: a two-sided marketplace that connects firms and individual security researchers (“ethical” hackers) to facilitate the discovery of software vulnerabilities. Researchers get acknowledged for valid submissions, but only the first submission of a distinct vulnerability is re...

Background: A large percentage of the deaths from the first wave of COVID-19 in 2020 occurred among residents of long-term care facilities. Objective: There are two competing explanations for this phenomenon. First, the structural features of such settings may lead to death. Alternatively, individuals living in these facilities are in poorer health...

Since its launch in 2009 much has been written about Bitcoin, cryptocurrencies, and blockchains. While the discussions initially took place mostly on blogs and other popular media, we now are witnessing the emergence of a growing body of rigorous academic research on these topics. By the nature of the phenomenon analyzed, this research spans many a...

As the number of cryptocurrencies has exploded in recent years, so too has the fraud. One popular strategy is when actors promote coordinated purchases of coins in hopes of temporarily driving up prices. Prior work investigating such pump and dump schemes has focused on the immediate impact to prices following pump signals, which were largely inter...

The recent introduction of thousands of cryptocurrencies in an unregulated environment has created many opportunities for unscrupulous traders to profit from price manipulation. We quantify the scope of one widespread tactic, the “pump and dump”, in which actors coordinate to bid up the price of coins before selling at a profit. We joined all relev...

Since Bitcoin’s introduction in 2009, interest in cryptocurrencies has soared. One manifestation of this interest has been the explosion of newly created coins and tokens. In this paper, we analyze the dynamics of this burgeoning industry. We consider both cryptocurrency coins and tokens. The paper examines the dynamics of coin and token creation,...

This book describes and analyses developments in the Israeli economy from 1995 to 2017. During this period, inflation was vanquished, the deficit in the balance of payments turned into a surplus, the public debt to GDP ratio sharply decreased, and unemployment has declined to an historical low. Nevertheless, the economy still suffers from many mala...

Patent citations have become an acceptable proxy for inventions’ quality. Our study offers the first systematic exploration of uncited patents. Analyzing data on all US patents issued between 1976 and 2008, we examine the ratio of uncited patents out of all patents granted each year. We find a robust pattern, consistent across technological fields,...

A large literature has used patent data to measure knowledge spillovers across inventions but few papers have explicitly measured the impact of the collaboration networks formed by inventors on the quality of invention. This paper develops a method to measure the impact of collaboration networks of inventors on invention quality. We apply this meth...

A large percentage of the deaths from COVID-19 occur among residents of long-term care facilities. There are two possible reasons for this phenomenon. First, the structural features of such settings may lead to death. Alternatively, it is possible that individuals in these facilities are in poorer health than those living elsewhere, and that these...

This paper extends the blockchain sustainability framework of Budish (2018) to consider proof of stake (in addition to proof of work) consensus mechanisms and permissioned (where the number of nodes are fixed) networks. It is demonstrated that an economically sustainable network will involve the same cost regardless of whether it is proof of work o...

Research Summary We examine the importance of office suites for the evolution of the PC office software market in the 1990s. An estimated discrete demand choice model reveals a positive correlation of consumer values for spreadsheets and word processors, a bonus value for suites, and advantages for Microsoft products. We employ the estimates to sim...

To its proponents, the cryptocurrency Bitcoin offers the potential to disrupt payment systems and traditional currencies. It has also been subject to security breaches and wild price fluctuations. This paper identifies and analyzes the impact of suspicious trading activity on the Mt. Gox Bitcoin currency exchange, in which approximately 600,000 bit...

Knowledge spillovers in Open Source Software (OSS) can occur via two channels: In the first channel, programmers take knowledge and experience gained from one OSS project they work on and employ it in another OSS project they work on. In the second channel, programmers reuse software code by taking code from an OSS project and employing it in anoth...

We investigate how distributed denial-of-service (DDoS) attacks and other disruptions affect the Bitcoin ecosystem. In particular, we investigate the impact of shocks on trading activity at the leading Mt. Gox exchange between April 2011 and November 2013. We find that following DDoS attacks on Mt. Gox, the number of large trades on the exchange fe...

We analyze how network effects affect competition in the nascent cryptocurrency market. We do so by examining early dynamics of exchange rates among different cryptocurrencies. While Bitcoin essentially dominates this market, our data suggest no evidence of a winner-take-all effect early in the market. Indeed, for a relatively long period, a few ot...

Product development within and across community-based and geographically dispersed virtual organizations is becoming an increasingly important mechanism through which individual knowledge holders create and disseminate knowledge in joint efforts to generate products. Without the benefits of face-to-face communication, such organizations face a part...

We analyze how network effects affect competition in the nascent cryptocurrency market. We do so by examining the changes over time in exchange rate data among cryptocurrencies. Specifically, we look at two aspects: (1) competition among different currencies, and (2) competition among exchanges where those currencies are traded. Our data suggest th...

Clements (2004) makes the following two claims: (i) unlike direct network effects, increases in the size of the market do not, in the case of indirect network effects, make standardization more likely, but (ii) indirect network effects are associated with excessive standardization. We show in Clements’ framework that neither of these results are co...

Cloud computing is defined to be Internet based computing technology, where the term 'cloud' simply means Internet - and cloud computing refers to services that are accessed directly over the Internet. There are essentially three categories of cloud computing. (i) Iaas (Infrastructure as a Service) - number crunching, data storage and management se...

The open source model is a form of software development in which the source code is made available, free of charge, to all interested parties; further users have the right to modify and extend the program. Open source software (OSS) methods rely on developers who reveal the source code under an open source license. Under certain types of open sourc...

Knowledge spillovers are a central part of knowledge accumulation. The article focuses on spillovers that occur through the interaction between different researchers or developers who collaborate on different research projects. The article distinguishes between project spillovers and contributors' spillovers and between direct and indirect spillove...

The open source model is a form of software development in which the source code is made available, free of charge, to all interested parties; further users have the right to modify and extend the program. Open source software (OSS) methods rely on developers who reveal the source code under an open source licence. Under certain types of open sourc...

As we begin our final three-year term as editors, we would like to reflect on the learning steep learning curve we have been on for the last five years since we took over the journal on January 1, 2005. This document briefly summarizes our thoughts.

In this paper, we employ a rich data set at the individual level in order to examine which factors are most highly correlated with obesity. Our main result is that, even after controlling for income levels and other factors, high “price-sensitivity†for food products is associated with high obesity rates. We find that a woman of average height w...

To understand the relationship between information flows and white-collar output, we collected unique data on email communications to study the network connecting individuals in a management recruiting firm. We also gathered data on revenues and contracts at the individual level. Our empirical results suggest that the size of an individual's intern...

Can indirect network effects lead to adoption externalities? If so, when? We show that in markets where consumption benefits arise from hardware/software systems, adoption externalities will occur when there are (i) increasing returns to scale in the production of software, (ii) free entry in software, and (iii) consumers have a preference for soft...

The open source model is a form of software development with source code that is typically made available to all interested parties. At the core of this process is a decentralized production process: open source software development is done by a network of unpaid software developers. Using data from Sourceforge.net, the largest repository of Open S...

Software security is an important concern for vendors, consumers, and regulators since attackers who exploit vulnerabilities can cause significant damage. In this brief paper, I discuss key themes in the budding literature on the economics of cyber-security. My primary focus is on how economics incentives affect the major issues and themes in infor...

A network effect exists if the consumption benefits of a good or service increase with the total number of consumers who purchase compatible products. A growing empirical literature examines technological adoption of products with network effects. The early literature mainly addressed the question of whether network effects are indeed significant;...

We employ a unique data set on white-collar workers that combines direct observations of individual use of information technology as well as objective information on individual performance. The main hypothesis we examine is whether heavier users of IT are more productive, and if heavier users of IT are indeed more productive, how does this increase...

Open source software (OSS) is an economic paradox. Development of open source software is often done by unpaid volunteers and the “source code” is typically freely available. Surveys suggest that status, signaling, and intrinsic motivations play an important role in inducing developers to invest effort. Contribution to an OSS project is rewarded by...

Software security is an important concern for vendors, consumers, and regulators since attackers who exploit vulnerabilities can cause significant damage. In this brief paper, I discuss key themes in the budding literature on the economics of cyber-security. My primary focus is on how economics incentives affect the major issues and themes in infor...

Software security is a major concern for vendors, consumers, and regulators since attackers that exploit vulnerabilities can cause substantial damages. When vulnerabilities are discovered after the software has been sold to consumers, the firms face a dilemma. A policy of disclosing vulnerabilities and issuing updates protects only the consumers wh...

Theoretical and factual studies of ways that the rapidly evolving digital economy has changed the structure of different industries, focusing on the software and music industries. Digital technology has dramatically changed the structure of many industrial sectors. The rise of the Internet and increased broadband access have given rise to new busin...

This article explores the relationship between native language and use of the Internet. I study this issue empirically using a unique data set on Internet use at the individual level in Quebec. The results suggest that most Que-becois are using the web intensively in English. Furthermore, the difference between native French and native English spea...

To take development and budgeting decisions for research activi- ties the officials in charge need to constantly evaluate and assess the quality of research. Over the years a handful of scoring methods for academic journals have been proposed. Discussing the most prominent methods (de facto standards) we show that they cannot distinguish quality fr...

In recent years, economists have begun asking whether incentive schemes like the patent system provide proper incentives for firms to invest in path-breaking research and development. Such an analysis requires a good measure of the value of innovations and patents. This quantification is not an easy task especially in the digital economy, which is...

In this paper, we examine how software vulnerabilities affect firms that sell software and consumers that purchase software. In particular, we model three decisions of the firm: (I) an upfront investment in the quality of the software to reduce potential vulnerabilities, (II) a policy decision whether to announce vulnerabilities, (III) and a price...

In April 1997 a consortium of hardware manufacturers and movie studios launched the DVD format. By that fall, electronics retailing giant Circuit City announced its intention to launch a partially incompatible format known as DIVX. This chapter assesses Circuit City’s strategy to establish the dominant standard for digital video technology. We iden...

In this paper, we examine how software vulnerabilities affect firms that license software and consumers that purchase software. In particular, we model three decisions of the firm: (i) an upfront investment in the quality of the software to reduce potential vulnerabilities; (ii) a policy decision whether to announce vulnerabilities; and (iii) a pri...

In this Paper we consider the economics of platform competition in telecommunications. Platform competition occurs when different, sometimes incompatible, technologies compete to provide telecommunications services to end-users. Battles between competing technologies have been an important feature of telecommunications in the last twenty or so year...

The authors take a preliminary look at the interaction between patenting and standardization committee participation in the US modem industry. Both involve a much wider set of firms than the downstream modem manufacturers themselves. Not surprisingly, the two activities are highly correlated across firms. Using five-year periods, Granger causality...

Using a unique dataset we examine empirically which factors explain output per contributor in open source projects. We find that the output per contributor of open source programmes is much higher when licenses are less restrictive. Further examination suggests that the difference in output per contributor is in large part due to many more contribu...

We test empirically for network effects and preannouncement effects in the DVD market. We do this by measuring the effect of potential (incompatible) competition on a network undergoing growth. We find that there are network effects. The data are generally consistent with the hypothesis that the preannouncement of DIVX temporarily slowed down the a...

In April 1997 a consortium of hardware manufacturers and movie studios launched the DVD format. By that fall, electronics retailing giant Circuit City announced its intention to launch a partially incompatible format known as DIVX. This chapter assesses Circuit City’s strategy to establish the dominant standard for digital video technology. We iden...

Economists often play crucial roles in designing and implementing public policies; thus it is of importance to better understand the values that underlie their decisions. We explore the value hierarchies of economists in four studies: The first two studies examine whether value differences exist between students of economics and other social scienc...

In April 1997, a consortium of hardware manufacturers and movie studios launched the DVD format. By that fall, electronics retailing giant Circuit City announced its intentions to launch a partially incompatible format known as DIVX. This Paper assesses Circuit City’s strategy to establish the dominant standard for digital video technology. We iden...

Since 1994, Europe and North America have taken divergent approaches to managing spectrum for wireless voice and data services, the so-called 2G and 3G bands. (There are several so-called generations in mobile—first generation (1G) is analogue service, second generation (2G) is digital, while third generation (3G) refers to higher bandwidth packet...

Our paper examines the importance of strategic bundling for the evolution of market structure and the performance of the PC office software market. Using a discrete choice model of product differentiation, we find strong empirical support for negative correlation in consumer preferences over word processors and spreadsheets. Negative correlation be...

In this Paper, I explore the relationship between native language and use of the Internet and examine whether English is likely to retain its first-mover advantage of a large installed base of English language websites. I study this issue empirically using a unique dataset on (home) Internet use at the individual level in Quebec from Media Metrix....

The telecommunications industry in Israel has changed significantly in recent years. This paper examines key issues that will arise in Israel as a result of these major changes and argues that the major changes in the telecommunications industry require significant changes in the regulatory structure. The paper first provides important background m...

Given the dramatic growth of the Internet and information-technology industries in general, and the importance of interconnection in these networks, the economics of compatibility and standardization has become mainstream economics. In this paper, I examine several key policy aspects of standard setting in industries with network effects. Copyright...

The issue of market-based versus mandated standards has been addressed in many settings. In most settings in which network effects are present, compatibility across platforms has been a key determinant of the success or failure of a particular technology. In the case of wireless telecommunications, however, interconnection and the availability of t...

Our goal is to distinguish between the following two hypotheses: (A) The Internet will remain disproportionately in English and will, over time, cause more people to learn English as second language and thus solidify the role of English as a global language. This outcome will prevail even though there are more native Chinese and Spanish speakers th...

Search engines hold the key to helping consumers access the wealth of information on the web. In this paper I examine the evolution of and competition in the internet search engine market. The goal of my analysis is to examine whether early entrants benefit in the long run from their first-mover position in internet markets. I find that while early...

We briefly review the rationale behind technological alliances and provide a snapshot of their role in global competition, especially insofar as it is based around intellectual capital. They nicely illustrate the increased importance of horizontal agreements and thus establish the relevance of the topic. We move on to discuss the organisation of in...

In the early 1990s Israel experienced a surge of immigration from the former Soviet Union. Russian immigrants had high relative education levels. There is little evidence that the immigration shock put downward pressure on Israeli wages. We examine two mechanisms through which Israel may have absorbed labor-supply changes related to the Russian imm...

We address the possibility of foreclosure in markets where the final good consists of a system composed of a hardware good and complementary software and the value of the system depends on the availability of software. Foreclosure occurs when a hardware firm merges with a software firm and the integrated firm makes its software incompatible with a...

We examine the diffusion of a hardware/software system. For such systems there is interdependence between the hardware-adoption decisions of consumers and the supply decisions of software manufacturers. Hence there can be bottlenecks to the diffusion of the system. We consider the CD industry and estimate the (direct) elasticity of adoption with re...

Search engines hold the key to helping consumers access the wealth of information on the web. In this paper, I examine the evolution of and competition in the internet search engine market. I find that while early entrants (Yahoo, Lycos, Excite, Infoseek, and Altavista) still have an advantage, this advantage has been declining significantly over t...

This paper provides a survey on studies that analyze the macroeconomic effects of intellectual property rights (IPR). The first part of this paper introduces different patent policy instruments and reviews their effects on R&D and economic growth. This part also discusses the distortionary effects and distributional consequences of IPR protection a...

In most cases, the premature announcement of a future product cannot be anti-competitive. When there are network effects, however, firms may have incentives to strategically prenannounce products; such preannouncements are often referred to as "vaporware." Anticompetitive vaporware allegations have been leveled at IBM and Microsoft. Despite the ant...

In this paper we examine the diffusion of a hardware/software system. For such systems there is interdependence between the hardware adoption decisions of consumers and the supply decisions of software manufacturers. Hence there can be bottlenecks to the diffusion of the system which stem not from high prices but from the fact that the complementar...

Two important welfare implications of network effects are that (1) market forces often result in suboptimal standardization, that is, left alone the market may fail to achieve standardization when it is socially desirable and (2) even if the market settles on a standard, the chosen standard may be inferior. Some policy makers have interpreted these...

Several recent studies found that the behavior of economists was less cooperative than the behavior of non-economists. However, other studies found that economists behaved no differently than other individuals. In this paper, we study this issue by examining personal value priorities of economics students and students from other disciplines. Values...

Recent progress toward a comprehensive peace in the Middle East has led to a relaxation of the enforcement of the Arab economic boycott of Israel. This in turn has led to the entry of all the major Japanese and Korean automobile manufacturers into the Israeli market. We examine the effect of the Arab economic boycott on this market. Using recent ad...

In Israel, area cable television licenses were auctioned sequentially. This paper provides evidence that there were interdependencies among many of the franchises and that subscriber fees for the interdependent franchises decreased over time in this auction. Copyright 1997 by Blackwell Publishing Ltd

An important development in Europe was the emergence of nationally circulating commodity money. Asymmetric information between coin producers and users provided rulers with an opportunity to supply a public good: standard universally accepted coins. The authors describe the development of a sophisticated monetary system (bureaucracy) in medieval Fr...

In this paper we examine the dyamic resolution of technological adoption in "hardware/software" systems. We are interested in determining to what extent software availability affects hardware sales and/or vice-versa. We first develop a dynamic model for estimating demand when costs (and license prices) are declining over time. We then estimate it e...

In this paper, we assess the effect of hardware control of software provision in markets in which the consumption benefit of a durable or hardware good is a function of the variety of complementary products or software available. We show that when an incumbent can commit to an installed base of software, the market outcome is socially inefficient....

In this paper we address the possibility of foreclosure in markets where the final good consists of a system composed of a hardware good and compelementary software and the value of the system depends on the availability of software.