The Economics of Electronic Commerce,9781578700141

The Economics of Electronic Commerce

by ; ;
Edition: 1st
ISBN13: 9781578700141
ISBN10: 1578700140
Format: Paperback
Pub. Date: 1997-06-01
Publisher(s): Prentice Hall
List Price: $66.65

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Summary

While all other electronic commerce titles focus on "how to," The Economics of Electronic Commerce is the first to present current issues of electronic commerce from an economics perspective. Everyone involved in building electronic commerce applications and systems, as well as Internet consultants and economists, needs this foundational information for the future of the Internet.

Table of Contents

1 Electronic Commerce and the Internet
1(58)
1.1. Developments in Internetworking
2(10)
Distributed and Networked Computing
3(2)
Open Networks
5(4)
Two-way Communications and the Web
9(3)
1.2. Electronic Commerce
12(10)
Electronic Commerce Examples
13(2)
Electronic Commerce as a Communications Network
15(1)
Electronic Commerce of Digital Products
16(5)
Commercial Potential of the Internet
21(1)
1.3. Market Characteristics of Electronic Commerce
22(13)
Current Commercial Uses of the Internet
23(2)
User Characteristics
25(2)
Competition and Market Organization
27(3)
Business Organization and Virtual Firms
30(2)
Legal Environment
32(3)
1.4. Current Issues in Electronic Commerce
35(16)
Contents and Quality
35(3)
Copyrights versus Users Rights
38(1)
Copyright and the Freedom of Speech
39(1)
Legal and Economic Considerations of Copyrights
40(1)
Interactive Advertising and the Use of Consumer Information
41(1)
Push or Pull Advertising
42(1)
Measuring the Impact of Online Advertising
43(1)
Targeted Advertising and Privacy
44(1)
Internet Intermediaries
45(1)
Security and Privacy of Internet Transactions
46(2)
Pricing Strategies for Digital Products
48(2)
Online Taxation, Regulation, and Other Legal Issues
50(1)
1.5. Summary
51(2)
References
53(1)
Suggested Readings and Notes
54(1)
History of the Internet
54(1)
Firms and Markets
54(1)
Electronic Data Interchange (EDI)
55(1)
Internet Resources
55(4)
Implications of Digital Process
55(1)
The Internet Society (ISOC)
56(3)
2 Characteristics of Digital Products and Processes
59(34)
2.1. What Are Digital Products?
60(4)
2.2. Characteristics of Information Products
64(5)
Dependence on Individual Preference
65(1)
Transitory or Cumulative Utility
65(1)
Externalities of Information Products
66(3)
Intrinsic Values of Digital Products
69(1)
2.3. The Physical Nature of Digital Products
69(18)
Indestructibility
70(2)
Transmutability
72(1)
Reproducibility
73(1)
Physical Nature and Economic Issues
74(10)
Product Selection Strategies Based on the Taxonomy
84(1)
Changing Time Dependence
85(1)
Changing Usage Patterns
85(1)
Transfer Mode and Externalities
86(1)
2.4. Summary
87(2)
References
89(1)
Suggested Readings and Notes
89(2)
Value of Information
89(1)
Electronic Markets
90(1)
Network Externalities
90(1)
Internet Resources
91(2)
Java Programming Language
91(1)
Commercial Sites Index
91(1)
Virtual Museums and Florist
91(1)
Medical Sites on the Internet
92(1)
3 Internet Infrastructure and Pricing
93(44)
3.1. Internet Pipelines
93(3)
3.2. Traffic Control on the Internet
96(7)
Packet Switching
96(1)
Internet Protocol Addresses
97(3)
Transmission Control Protocol
100(1)
Unicast, Broadcast, and Multicast
100(3)
3.3. The Infrastructure Convergence
103(20)
The Convergence in the Last Mile
104(3)
Long-Haul Traffic
107(2)
Congestion and Infrastructure Pricing
109(3)
Ideal Economic Pricing Proposals
112(2)
Dynamic Optimal Pricing
114(3)
Static Priority Pricing
117(1)
The Smart-Market Approach
118(1)
Connection-Only and Flat-Rate Pricing
119(3)
Voluntary User Declarations
122(1)
Synopsis
122(1)
3.4. Public Policy and Infrastructure
123(4)
Public Policy for a Publicly Owned Network
124(1)
Public Policy for a Privately Owned Network
125(2)
3.5. Summary
127(3)
References
130(3)
Suggested Readings and Notes
133(1)
Further Readings on Game Theory
133(1)
Internet Resources
133(4)
The Internet Networking Infrastructure
133(1)
Domain Name Registration
134(1)
MBONE (Multicast Backbone)
134(1)
IETF IP Multicasting Proposals
135(1)
Broadband Online Services
135(1)
4 Quality Uncertainty and Market Efficiency
137(38)
4.1. Economics of the Lemons Market
139(6)
Price as a Signal for Quality
141(2)
Remedies for the Lemons Problem
143(2)
4.2. Information Channels in Electronic Commerce
145(10)
Sellers Provide Product Information
145(3)
Freeware, Shareware, and Other Promotions
148(1)
Free Products Online
148(2)
The Economics of Try-Outs
150(2)
Third-Party Information
152(1)
Retailers and Other Brokers
153(2)
4.3. Quality and Intermediaries
155(8)
Transactional Efficiencies
156(2)
Intermediaries as Experts
158(3)
Intermediaries as an Information Source
161(1)
Intermediaries as Producers
162(1)
4.4. Intermediaries and Contracts
163(6)
Subcontracting Systems
164(2)
Incomplete Contracts
166(3)
4.5. Summary
169(1)
References
170(1)
Suggested Readings and Notes
171(2)
Economics of the Lemons Problem
171(1)
Repeat Purchases and Reputation
172(1)
Internet Resources
173(1)
Internet Commerce
173(1)
Internet and Economics
173(2)
5 Economic Aspects of Copyright Protection
175(38)
5.1. Economic History of Copyright
176(10)
The Property Aspect of Copyright
178(4)
The Authorship Aspect of Copyright
183(1)
Public Interest
184(2)
5.2. The Nuts and Bolts of Copyrights
186(7)
Objects Covered by Copyright
186(1)
Terms of Copyright
187(1)
Works That Cannot Be Copyrighted
187(2)
Specific Rights of Authors Granted by Copyright
189(1)
Fair Use Doctrine
190(1)
Other Intellectual Property Laws
191(1)
5.3. Copyright Protection and Digital Products
192(10)
Reproduction
192(1)
Reproductions on the Internet
193(2)
Economic Implications of Reproduction
195(1)
Resale and Distribution
195(1)
Resale and the First Sale Doctrine
196(2)
Resale Prevention and Pricing
198(2)
Content Control
200(2)
5.4. Market Protection Through Business Strategies
202(2)
5.5. Policy Implications
204(3)
Copyright and Antitrust Concerns
205(2)
5.6. Summary
207(2)
References
209(1)
Suggested Readings and Notes
210(1)
Historical Development of Copyright Laws
210(1)
Patents and Economics
211(1)
Internet Resources
211(2)
Articles
211(1)
Internet Copyright Sites
212(1)
Texts of Copyright Laws
212(1)
World Intellectual Property Organization (WIPO) Conference Resources
212(1)
6 Signaling Quality and Product Information
213(50)
6.1. Advertising on the Internet
214(9)
Growth in Electronic Advertising
215(2)
Types of Internet Advertising
217(1)
Banner Ads
218(2)
Selling Advertising to Consumers
220(2)
Web Storefronts
222(1)
6.2. The Economics of Advertising
223(16)
The Economic Roles of Advertising
224(7)
The Informational Content of Advertising
231(1)
Information about Information Products
231(3)
The Effect of Advertising on Price
234(3)
Advertising and Product Differentiation
237(2)
6.3. Other Strategies to Convey Product Information
239(5)
Repeat Purchases and Reputation
239(1)
Reputation Building in Electronic Commerce
240(1)
Renting a Reputation
241(1)
Shareware and Wasted Investments
242(1)
Quality Guarantees for Digital Products
243(1)
6.4. Marketing Strategies for the Internet
244(13)
Myths and Popular Wisdom about Online Advertising
245(1)
Broadcast versus Targeted Advertising
246(3)
Push versus Pull Advertising
249(2)
Advertisements as Commodities
251(1)
Passive versus Active Marketing
252(1)
Electronic Malls and Intermediaries
253(1)
Is Online Advertising Effective?
254(2)
Providing Consumer Information
256(1)
6.5. Summary
257(1)
References
258(2)
Suggested Readings and Notes
260(1)
Advertising and Competition
260(1)
Signaling
260(1)
Internet Resources
261(2)
Web Directory for Advertising
261(1)
Popular Wisdom on Internet Marketing
261(1)
Shareware Resources
262(1)
7 Consumers' Search for Information
263(50)
7.1. Consumer Searches and Economic Efficiency
263(7)
Search Costs
265(2)
Consumer Searches and Electronic Commerce
267(2)
Digital Products and Consumer Searches
269(1)
7.2. The Search Market and Intermediaries
270(10)
Search Market Efficiency
271(1)
Content Providers
271(1)
Selection
271(1)
Access
272(4)
Search Efficiency in Intermediaries
276(2)
Search Efficiency in Informational Content
278(2)
7.3. Search Engines on the Internet
280(2)
Search or Surf?
281(1)
Inadequacies of Search Engines
281(1)
7.4. Market Efficiency In Various Information Sources
282(12)
The World Wide Web
283(1)
Web Searches
284(1)
Gopher
285(1)
Gopher Search
285(1)
Anonymous FTP and Telnet
286(1)
FTP Search by Archie
287(1)
UseNet
287(2)
Mailing Lists
289(1)
Electronic Messaging
290(2)
E-mail Address Search
292(1)
Consumer Learning and Search
292(2)
7.5. Information Efficiency in Web Search Engines
294(13)
Information Acquisition and Efficiency
298(7)
Advertising versus Consumer Searching
305(2)
7.6. Summary
307(2)
References
309(1)
Suggested Readings and Notes
309(4)
Consumer Search
309(1)
Internet Resources
310(1)
Search Engines
310(1)
Software Agents and Filtering
311(1)
Robomoderation
311(2)
8 Product Choices and Discriminatory Pricing
313(60)
8.1. Product Differentiation and Pricing in Economics
315(10)
What Is Product Differentiation?
315(1)
Horizontal Differentiation
316(1)
Vertical Differentiation
317(1)
The Incentive to Differentiate
318(1)
Chamberlinian Monopolistic Competition
319(1)
Price Discrimination
320(2)
Variations in Consumption Values: A Simple Case of Price Discrimination
322(1)
Product Matching
323(2)
8.2. Product Customization
325(6)
Sellers' Use of Transmutability
325(3)
Gains and Losses from Customization
328(1)
Consumer Arbitrage
328(1)
Reduced Waste
329(1)
Price Discrimination
329(2)
8.3. Use of Consumer Information
331(16)
Primary and Secondary Consumer Information
331(6)
Privacy and Anonymity
337(1)
Anonymity as a Myth
337(3)
Legal Efforts to Protect Privacy
340(1)
Market-Based Solution to Protect Personal Information
341(3)
Consumer Information and Discriminatory Pricing
344(3)
8.4. Pricing Digital Products
347(20)
Cost Curves
348(1)
Standard U-Shaped Average Cost Curve
348(1)
Average Cost Curve of a Digital Product
349(3)
Strategic Factors in Pricing
352(1)
Quality Choices
352(3)
Product Differentiation
355(1)
Incentive Compatible Prices
356(3)
Selling versus Renting Digital Products
359(2)
Subscription and Bundling
361(4)
The Case for Microbundles and Micropayments
365(2)
8.5. Summary
367(1)
References
368(1)
Suggested Readings and Notes
369(2)
Nonlinear Pricing
369(1)
Product Differentiation
370(1)
Price Discrimination
370(1)
Internet Resources
371(2)
Customized Internet Products
371(1)
Privacy on the Internet
371(1)
Cookies
372(1)
Spoofing on the Internet
372(1)
9 Financial Intermediaries and Electronic Commerce
373(34)
9.1. Types of Financial Intermediaries
375(3)
9.2. Transactional Efficiencies
378(10)
Phases of Transaction
379(1)
Efficiency in Search Process
379(2)
Negotiation and Settlement Processes
381(1)
Financial Intermediaries: Electronic Market Case Studies
382(1)
Internet Initial Public Offerings
383(2)
Digital Exchange Markets
385(3)
9.3. Transformation Functions
388(2)
Maturity Transformation
389(1)
Volume Transformation
389(1)
Electronic Commerce Effects
390(1)
9.4. Information Brokerage
390(9)
Information Uncertainty and Risk
390(1)
Information Trading
391(3)
Certification and Assurance
394(5)
9.5. Summary
399(2)
References
401(1)
Suggested Readings and Notes
402(1)
Financial Intermediation and Credit Rationing
402(1)
Internet Resources
403(4)
Electronic Banking Resource Center
403(1)
Encryption Technologies
403(1)
Financial Services on the Internet
404(1)
Digital Signature and Certification Services
404(3)
10 Electronic Payment Systems
407(56)
10.1 Electronic Payment Systems: An Overview
407(10)
Payment Patterns
408(2)
Types of Electronic Payment Systems
410(1)
Conventional Payment Process
411(6)
10.2. Payment Clearing Services
417(4)
10.3. Notational Funds Transfer
421(5)
10.4. Digital Currency Payment Systems
426(6)
Money as a Medium of Exchange
427(1)
Inside Money and Outside Money
428(2)
Needs for Electronic Currency Payment Systems
430(1)
Anonymity in Transactions
430(1)
Micropayments and the Internet
430(1)
The Transferability of Value
431(1)
10.5. Properties and Specifications of Digital Currencies
432(8)
Desirable Properties of Digital Currency
432(1)
Monetary Value
432(1)
Convenience
433(1)
Security
433(1)
Authentication
434(1)
Non-Refutability
434(1)
Accessibility and Reliability
434(1)
Anonymity
435(1)
Technical Specifications of Digital Currencies
435(1)
Ecash
436(1)
Millicent
438(1)
Mondex
439(1)
10.6. Evaluation and Policy Issues
440(11)
Information Contents of Transactions
440(2)
Transactional Efficiency
442(1)
Monetary Effects
443(6)
Effects on Market Organization
449(2)
10.7. Digital Currency and Governments
451(6)
Effects on Government Revenues
452(1)
Regulatory Issues
453(2)
Issues in International Commerce
455(2)
10.8. Summary
457(2)
References
459(1)
Suggested Readings and Notes
460(2)
Quantity Theory of Money
460(1)
Monetary Freedom
460(1)
Electronic Payment Systems
461(1)
Internet Resources
462(1)
Electronic Money Resources
462(1)
Standard Electronic Transactions (SET)
462(1)
11 Business and Policy Implications of Electronic Commerce
463(76)
11.1. Internet as the Great Equalizer
464(4)
The Virtual Equality
464(1)
The Reputational Transfer
465(1)
Declining Average Costs and the Advantage of Size
466(1)
Product Differentiation and Size
467(1)
11.2. Search Service and Its Market Implications
468(6)
Advertising in Broadcast Media
469(2)
Search Engines and Advertising
471(1)
Digital Cataloging Guidelines
472(1)
Content Description
472(1)
Search Interfaces
473(1)
11.3. Copyright Protection Standards
474(1)
11.4. The Use of Consumer Information
475(2)
11.5. Digital Products and Pricing
477(12)
Bundling and Subscription
477(5)
Unbundling and Micropayments
482(1)
Micropayments and Product Quality
483(4)
Information Products and Economics
487(2)
11.6. Taxation and the Future of Electronic Commerce
489(8)
Taxable Item
489(1)
Taxes on Access
490(2)
Taxes on Transactions
492(5)
Sales versus Transfer of Copyrights
496(1)
11.7. Anonymity and Legal Environment for Commerce
497(4)
11.8. Global Framework for Electronic Commerce
501(9)
Convergence in Spatial Markets
502(1)
Artificial Borders
503(2)
Uniform Commercial Environment
505(5)
11.9. Antitrust and Regulation Policies
510(18)
Economies of Scale and Regulation
511(2)
Interoperability, Standardization, and Market Dominance
513(3)
Network Externality and Monopolization
516(1)
Monopoly and Welfare Loss: The Problem
516(4)
Externalities and Their Effects
520(2)
Network Effects versus Network Externalities
522(1)
Anticompetitive Behaviors
523(1)
Common Carriers and Microsoft
524(1)
Vertical Integration and Retail Wheeling
525(3)
11.10. The Economics of Electronic Commerce and the Internet
528(5)
The Economics of Electronic Commerce
529(2)
The Economics of Information Infrastructure
531(2)
11.11. Summary
533(6)
References
534(2)
Suggested Reading and Notes
536(1)
Law for the Internet
536(1)
Internet Resources
536(1)
Online Commerce and Taxation
536(1)
Laws Regarding Computers
536(1)
Internet Telephony
537(2)
12 Future Directions for Economic Research
539(44)
12.1. The Role of Enabling Technologies
543(4)
12.2. The Virtual World is Built on the Physical World
547(4)
12.3. Components of the Virtual Economy
551(2)
12.4. The Convergence
553(5)
Convergence and the Market Structure
556(2)
12.5. The Virtual Economy in Action
558(5)
12.6. Growth of Virtual Intermediaries
563(3)
12.7. Customization and Smart Products
566(7)
Producer's Customization and Market Research
566(2)
Online Market Research
568(1)
Online Learning
569(2)
Consumer Customization
571(2)
12.8. Globalization and Cybernations
573(3)
12.9. Market-Clearing Mechanisms
576(2)
12.10. Summary
578(2)
References
580(1)
Internet Resources
581(2)
Smart Products
581(1)
Habitat and Virtual Communities
581(1)
The 21st Century Technologies
581(1)
Index 583

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