R. Preston McAfee


United States

Randolph Preston McAfee is an American economist, currently serving as a distinguished scientist at Google. His research has concentrated on microeconomics and industrial organization, on topics including auctions, bundling, price discrimination, antitrust, contracting, and mechanism design. More recently, he has been publishing research at the interface between microeconomics and computer science.

Voting History

Statement Comments
The COVID-19 pandemic has permanently changed how companies should think about business strategy. Strongly Agree “While a lot of attention has been justifiably focused on work-from-home policies, the evident fragility of long supply chains demands a reevaluation of cost versus risk. We learned that much business travel is unnecessary. The “digital divide” is evaporating, so a digital marketing and customer engagement strategy becomes universally effective.”
The COVID-19 pandemic will lead companies to relocate infrastructure and employees away from dense urban locations. Disagree “Cities are more productive and efficient, and the great urbanization of the past 50 years is unlikely to reverse. Moreover, Asian countries show that cities can manage infectious diseases. Companies will be more alert to the resilience of their supply chains, at least temporarily. Business travel is unlikely to recover to its 2019 peak.”
The California Consumer Privacy Act will undermine the targeted advertising market by giving consumers the right to opt out of allowing companies to sell personal data to third parties. Disagree “The California law won’t stop Facebook significantly, and the targeted ad market has a glut of inventory. Reducing the supply may help the market by increasing prices. The law will tend to favor big sites that can force opt-in: Facebook, Gmail, YouTube, TikTok, Amazon, and disfavor many others, an unfortunate unintended consequence. Free sites like Facebook may need to start charging to compel opt-in.”
In the wake of recent climate-related disasters and related events, such as the bankruptcy of PG&E, corporations are now planning for the increased operational risks and potential liabilities caused by climate change. Strongly Agree “Most corporations were examining the effects of climate change on their operations and future five years ago. Any that weren‘t would have started by now.”
Antitrust policy should intervene more decisively to limit the scope of large technology platforms. Agree “Antitrust enforcement in the 1960s was probably excessive (e.g., Von’s, 1966), but we’ve swung the other way and have let hundreds of ‘potential competition’ cases through without adequate scrutiny. WhatsApp/Facebook and Amazon/Zappos are particularly egregious, but so are the technology acquisition mergers that solidified the leaders' AI technologies. Broadband and smartphone tech are problematic.”
U.S. regulations have been rolled back in a number of areas, including emissions standards and clean water. Companies will decide to voluntarily adhere to rules that closely resemble the original standards. Disagree “A few high-profit firms will decide to meet or even exceed historical standards. Others will not change their processes right away. But over time, most firms will not expend additional resources to meet standards they are not required to meet, and [they will] blame their rivals. After all, we have seen firms, in fact, cheat and not meet standards, to save money.”
The Business Roundtable’s new Statement on the Purpose of a Corporation indicates a shift away from shareholder value maximization as the sole purpose of the corporation and toward a broader view of value creation.
This shift will have material impact on the well-being of U.S. workers.
“The tension is between long-run and short-run goals. Often, maximizing long-run value involves activities that benefit workers and the public. The new focus gives management greater leeway to pursue long-run value maximization. Overall, it will probably make little difference.”
In the next decade, we will see the first sustainably profitable private commercial activities in space. Strongly Agree “SpaceX’s Starlink is probably already close to profitability. The first profitable private space activities will likely involve Earth communications rather than, say, mining.”
Introducing 5G networks 3-5 years ahead of other countries will give Chinese firms an advantage. Agree “Early experience, learning by doing, control of standards, and large scale will provide an advantage to equipment manufacturers like Huawei and ZTE, and to handset suppliers, especially with barriers to foreign firms in the Chinese telephony market.”
A hard Brexit will have a significant negative impact on many businesses, even if they do not have a U.K. or European presence. Agree “Uncertainty is bad for business, and businesses are more interconnected than ever. Hard Brexit creates many uncertainties for trade, movement of workers and executives, Northern Ireland, etc. U.S. or Asian businesses that sell into the EU through European distribution or source parts in Europe will be affected. Supply chains are global.”
China is no longer the most attractive growth opportunity for Western multinationals. Agree “Given the size of its economy, China’s rates of growth have fallen. China’s self-favoritism limits opportunities. India is more attractive for many companies, looking like China 20 years ago but with better institutions.”
In the next five years, the blockchain will have a transformative effect on finance in emerging markets. Disagree “Blockchain is a distributed ledger. Ledgers matter and are valuable but are hardly transformative against existing technology. We will see applications of blockchain, some of which could be accomplished without blockchain but requiring a bit more trust in a central authority. Incremental — not transformative.”
In the absence of a carbon tax, industry self-regulation can help mitigate the worst fallout from climate change. Strongly Disagree “There are limited successes of industry self-regulation but none at the scale of climate change.”
Amazon’s new $15 per hour minimum wage will force other companies to follow suit. Neither Agree nor Disagree “Amazon’s effects will be primarily local and, while it has many fulfillment centers, overall employment is not enough to cause a large effect. Some companies will follow suit, for morale and retention, primarily because the blue-collar market is getting quite tight.”
Restrictions on skilled immigration will cause US firms to to shift more operations overseas. Agree “In the tech sector, companies struggle to get more talent and already have large operations in London, Israel, Bangalore, China, and other locations. Substitution is already happening.”
Uber has to develop self-driving cars in the next 10 years in order to remain viable. Strongly Disagree “Being the market maker — connecting buyers and vehicles — is a better position than developing self-driving tech. Uber driverless will push the dozen other providers away from Uber’s market.”
A trade war will be more disruptive to business than to consumers. Agree “Factories are hard to start and easy to close, so trade wars cause terrible disruption of supply chains, with very slow recovery for businesses and workers.”
Concern over consumer privacy will fundamentally limit businesses’ ability to use big data. Disagree “Privacy will cause firms to jump through some hoops but will not seriously limit the use of data.”