This paper, authored by Avi Goldfarb and Catherine Tucker, reviews the impact of digital technology on economic activity, focusing on five key cost reductions: search costs, replication costs, transportation costs, tracking costs, and verification costs. Digital technology has revolutionized the way information is stored, computed, and transmitted, leading to significant changes in various economic sectors. The authors highlight how these cost reductions have transformed industries such as retail, labor, and media, and have influenced policy debates, particularly regarding net neutrality and copyright. They discuss the implications of these changes for firms, regions, and individuals, emphasizing the need for a new economic framework to understand the effects of digital economics. The paper also explores the challenges and opportunities presented by the non-rival nature of digital goods, such as the rise of open-source software and the impact on traditional copyright models. Overall, the review underscores the importance of digital economics in shaping the future of economic activity and policy.This paper, authored by Avi Goldfarb and Catherine Tucker, reviews the impact of digital technology on economic activity, focusing on five key cost reductions: search costs, replication costs, transportation costs, tracking costs, and verification costs. Digital technology has revolutionized the way information is stored, computed, and transmitted, leading to significant changes in various economic sectors. The authors highlight how these cost reductions have transformed industries such as retail, labor, and media, and have influenced policy debates, particularly regarding net neutrality and copyright. They discuss the implications of these changes for firms, regions, and individuals, emphasizing the need for a new economic framework to understand the effects of digital economics. The paper also explores the challenges and opportunities presented by the non-rival nature of digital goods, such as the rise of open-source software and the impact on traditional copyright models. Overall, the review underscores the importance of digital economics in shaping the future of economic activity and policy.