Economics in Computer Science as a Research Interest

Subject: Economics
Pages: 5
Words: 1413
Reading time:
6 min
Study level: PhD


Human curiosity and strive for knowledge have necessitated the union of studies in various domains of sciences. The developments in knowledge-gathering spheres have led to the increase of more interdisciplinary and interdepartmental programs which have been implemented in universities. There is more and more interdisciplinary research done in various fields. Research interests also lie somewhere at the intersection of computer science and economics. There is a profound interest in investigating the connections between the two sciences. The existent and supposed connections between the two domains introduce new research fields exploring economic models and concepts as ways of establishing feasible solutions for emerging computer science challenges. By the same merits, computer science models are perceivably applicable in the drawing of solutions for challenges in economics. Computational and communication efficiency is the focus of computer science theory which can be applied to economics. There is also room for analyzing IT and Internet markets using economics analysis methodologies.

The following summary of outlined research interests, some of the work done in the computer science field that included economics concept as its base solution will be introduced. These works have been sources of deep inspiration and are of striking relevance to the research thought to be conducted in the fields. The paper also entails an outline of previous research attempts in the field.

Mathematical models in economics yield interesting insights into how to approach computer science problems. The paper entails three such studies. The paper also constitutes an outline of the field of study as well as an outline of economic concepts used in each particular research.

There has been a vast amount of research done on Internet inter-domain routing. The global goal is an efficient routing with packets traveling via the lowest-cost routes. As the packets travel through autonomous systems, there is no motivation for these systems to take care of the traffic that is not their own. Although protocols and standards exist for Internet inter-domain routing, no one is forced to conform to them. The system that does not follow can gain an advantage over the rest of the network by simply not going by the standard.

The Nobel Foundation (2007) presents that “Mechanism design” is a well-research field in Economics. This field is about setting up rules that determine how the economic activity will take place to achieve a preferred goal. Part of the mechanism design and a big part of economic theory as a whole is the concept of incentives. By setting up the rules for an activity a party gives incentives to participants to achieve the goal. That concept was brought into Internet inter-domain routing (J. Feigenbaum and C. Papadimitriou, et al: 2002) Autonomous systems are incentivized to supply honest information about costs for carrying traffic. Also, a source incentivized to use the lowest-cost routes to obtain global efficiency.

As the Internet has been rapidly expanding, Internet graph modeling became an important field of study in computer science. Internet graphs are needed for the scientist to run network simulations. Although properties of the Internet graph are known, to build an Internet graph model you need to understand the graph growth.

It is well known that an Internet graph has a power-law node degree distribution, but how to obtain such a graph is the subject of Internet graph generation. A. Fabrikant, et al (2002) assert that an economic model of optimizing trade-off is used to generate the graph. Each node that links to the graph is connected in such a way that it optimizes the trade-off between distance from the existing node and the centrality of the node it tries to connect to.

Resource allocation on a distributed computer system is a complex problem in computer science as so many factors, such as the number of users, different applications, and resources to consider, exist. To guarantee users on reliability and performance as well as guarantee the efficient use of a resource, a good algorithm is necessary.

As the title of D. F. Ferguson et al’s “Economic Models for Allocating Resources in Computer Systems, Market based Control of Distributed Systems, Ed. Scott Clearwater, and World Scientific Press” (1995) suggests, economics models were directly used in the field of computer science introduce a novel resource allocation algorithm. When applications are viewed as consumers and systems as suppliers, resource allocation can be addressed as we would in human economies. Consumers want to optimize the performance preference by getting resource it wants and suppliers want to optimize profit based on the consumer choice. The economics concepts such as price and money are used to satisfy consumers and suppliers. In computer systems, all agents are allocated with some wealth, and consequently, each one runs upon its utility or “satisfaction” function, which includes reliability and performance matrix until they agree.

As economics model economic behavior, economics can also model system behavior.

Previous types of research

In my attempt of investigating economics in computer science, I have worked on an Internet Topology project as presented by A. Fabrikant, E. Koutsoupias et al (2002). Papadimitriou’s model presents an approach for connection creation that is based on minimizing the function of trade-offs, distance, and centrality. The novel model presented in this propositions paper uses similar trade-offs functions, although, it generates points based on the real distribution of the routers rather than on random distribution as presented in A. Fabrikant, E. Koutsoupias et al (2002). The trade-offs function had to be fine-tuned to use the appropriate trade-off parameters. In particular, the model has been supplemented with various ways of obtaining the distance variable for determining link creation. Also, the centrality variable could represent different measurements, so different notions of centrality have also been added to the model. New results gave an insight into what can be a potential proof of the power emergent in the Internet graph. Some parameters were not even producing the power law in the resulting graph. The experimentation was aimed at exploring the trade-offs and the power-law emergent in the generated graph.

In my other attempt, the IT market has been used, PDA market to be precise, to analyze the products offered and competition in the market. Through the investigation of the market and using statistical analysis on the products offered in this market, conclusions were made about the market share distribution, its movement as new competitors enter the market. The process also entailed the classification of multiple technological industries by industry behavior. The thrust involved looking at the products that come into the market from the producers and an observation of how fast firms bring out these new products and also how important the product improvements over the older models are in the regard of how it relates to the market leader. It was important to observe the demand for PDAs to measure how much of the market growth was due to the effect of time, how much is due to improved characteristics as well as how much is due to a price change. The demand explains the firms’ behavior.

Conclusion and Intended Future Work

As the above survey of research work suggests, there is several ways to intersect computer science and economics. The turf of Enterprise Resource Planning (ERP) systems usability project provides a platform for the application of the perceived research paradigms.

EPR systems are business applications that provide an integrated solution to organizations’ IT needs and are one of today’s biggest IT investments. ERP benefits include best practice business processes, real-time access to information, and shared practices across the entire enterprise. (E.M. Shehab et al: 2004).

Forrester Research evaluated eleven ERP applications about usability issues (A. Gilbert: 2008) and found that many fell short on overall usability. Heikki Topi et al (2005) have identified ERP usability problems and grouped them into six categories: Identification and access to the correct functionality; transaction execution support; system output limitations; support in error situations; terminology problems and overall system complexity. And then Babaian, W. et al (2006) used collaboration theory to develop guidelines for how ERP UI should be structured. This novel approach emphasizes the relationship between collaborative support, task performance, and satisfaction.

Collaboration theory is closely related to activity modeling. In the collaboration model, we have two agents who both have knowledge and responsibility about the process and work together to complete the task. This type of modeling can be aligned with some models of economic activities. It would be interesting to investigate economics models and their applicability to ERP usability research.


N. Nisan and A. Ronen, “Algorithmic mechanism design,” Games and Economic Behavior 35 (2001), pages 166–196.

Nobel Foundation.”The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2007″.

J. Feigenbaum, C. Papadimitriou, R. Sami, and S. Shenker, “A BGP-based Mechanism for Lowest-Cost Routing,” in Proceedings of the 21st Symposium on Principles of Distributed Computing, ACM Press, New York, pages 173–182, 2002.

A. Fabrikant, E. Koutsoupias, C. Papadimitriou. Heuristically Optimized Trade-offs: A New Paradigm for Power Law in the Internet. STOC, 2002.

D. F. Ferguson, C. Nikolaou, J. Sairamesh, and Y. Yemini, Economic Models for Allocating Resources in Computer Systems, Market based Control of Distributed Systems, Ed. Scott Clearwater, World Scientific Press, 1995.

E.M. Shehab; M.W. Sharp; L Supramaniam; T.A. Spedding. Enterprise resource planning: An integrative review. Business Process Management Journal, 10(4):359–386, 2004.

A. Gilbert. Business apps get bad marks in usability. Web.

T. Babaian, W. Lucas, and H Topi. Improving ERP usability through user-system collaboration. International Journal of Enterprise Information Systems, 2, 2006.

Heikki Topi, Wendy Lucas, and Tamara Babaian. Identifying usability issues with an ERP implementation. International conference on Enterprise Information Sys-tems (ICEIS ), 2005.