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Economics of Electronic Commerce (Publisher: Macmillan Computer Publishing) Author(s): Soon-yong Choi; Andrew Whinston; Dale Stahl ISBN: 1578700140 Publication Date: 07/22/97 Brief Full Advanced Search Search this book: Search Tips Contents About This Book Trademark Acknowledgments Credits Chapter 1 - Electronic Commerce and the Internet Chapter 2 - Characteristics of Digital Products and Processes Chapter 3 - Internet Infrastructure and Pricing Chapter 4 - Quality Uncertainty and Market Efficiency Chapter 5 - Economic Aspects of Copyright Protection Chapter 6 - Signaling Quality and Product Information Chapter 7 - Consumers' Search for Information Chapter 8 - Product Choices and Discriminatory Pricing Chapter 9 - Financial Intermediaries and Electronic Commerce Chapter 10 - Electronic Payment Systems Chapter 11 - Business and Policy Implications of Electronic Commerce Chapter 12 - Future Directions for Economic Research Products | Contact Us | About Us | Privacy | Ad Info | Home Use of this site is subject to certain Terms & Conditions, Copyright © 1996-2000 EarthWeb Inc. All rights reserved. Reproduction whole or in part in any form or medium without express written permission of EarthWeb is prohibited. Read EarthWeb's privacy statement. To access the contents, click the chapter and section titles. Economics of Electronic Commerce (Publisher: Macmillan Computer Publishing) Author(s): Soon-yong Choi; Andrew Whinston; Dale Stahl ISBN: 1578700140 Publication Date: 07/22/97 Brief Full Advanced Search Search this book: Search Tips Table of Contents | Next Page 7 Contents Contents at a Glance Chapter One Electronic Commerce and the Internet 1 Chapter Two Characteristics of Digital Products and Processes 59 Chapter Three Internet Infrastructure and Pricing 93 Chapter Four Quality Uncertainty and Market Efficiency 137 Chapter Five Economic Aspects of Copyright Protection 175 Chapter Six Signaling Quality and Product Information 213 Chapter Seven Consumers' Search for Information 263 Chapter Eight Product Choices and Discriminatory Pricing 313 Chapter Nine Financial Intermediaries and Electronic Commerce 373 Chapter Ten Electronic Payment Systems 407 Chapter Eleven Business and Policy Implications of Electronic Commerce 463 Chapter Twelve Future Directions for Economic Research 539 Index 583 Page 8 Page 9 Table of Contents 1 Electronic Commerce and the Internet 1 1.1. Developments in Internetworking 2 Distributed and Networked Computing 3 Open Networks 5 Two-way Communications and the Web 9 1.2. Electronic Commerce 12 Electronic Commerce Examples 13 Electronic Commerce as a Communications Network 15 Electronic Commerce of Digital Products 16 Commercial Potential of the Internet 21 1.3. Market Characteristics of Electronic Commerce 22 Current Commercial Uses of the Internet 23 User Characteristics 25 Competition and Market Organization 27 Business Organization and Virtual Firms 30 Legal Environment 32 1.4. Current Issues in Electronic Commerce 35 Contents and Quality 35 Copyrights versus Users Rights 38 Copyright and the Freedom of Speech 39 Legal and Economic Considerations of Copyrights 40 Interactive Advertising and the Use of Consumer Information 41 Push or Pull Advertising 42 Measuring the Impact of Online Advertising 43 Targeted Advertising and Privacy 44 Internet Intermediaries 45 Security and Privacy of Internet Transactions 46 Page 10 Pricing Strategies for Digital Products 48 Online Taxation, Regulation, and Other Legal Issues 50 1.5. Summary 51 References 53 Suggested Readings and Notes 54 History of the Internet 54 Firms and Markets 54 Electronic Data Interchange (EDI) 55 Internet Resources 55 Implications of Digital Process 55 The Internet Society (ISOC) 56 2 Characteristics of Digital Products and Processes 59 2.1. What Are Digital Products? 60 2.2. Characteristics of Information Products 64 Dependence on Individual Preference 65 Transitory or Cumulative Utility 65 Externalities of Information Products 66 Intrinsic Values of Digital Products 69 2.3. The Physical Nature of Digital Products 69 Indestructibility 70 Transmutability 72 Reproducibility 73 Physical Nature and Economic Issues 74 Product Selection Strategies Based on the Taxonomy 84 Changing Time Dependence 85 Changing Usage Patterns 85 Transfer Mode and Externalities 86 2.4. Summary 87 References 89 Page 11 Suggested Readings and Notes 89 Value of Information 89 Electronic Markets 90 Network Externalities 90 Internet Resources 91 Java Programming Language 91 Commercial Sites Index 91 Virtual Museums and Florist 91 Medical Sites on the Internet 92 3 Internet Infrastructure and Pricing 93 3.1. Internet Pipelines 93 3.2. Traffic Control on the Internet 96 Packet Switching 96 Internet Protocol Addresses 97 Transmission Control Protocol 100 Unicast, Broadcast, and Multicast 100 3.3. The Infrastructure Convergence 103 The Convergence in the Last Mile 104 Long-Haul Traffic 107 3.4. Congestion and Infrastructure Pricing 109 Ideal Economic Pricing Proposals 112 Dynamic Optimal Pricing 114 Static Priority Pricing 117 The Smart-Market Approach 118 Connection-Only and Flat-Rate Pricing 119 Voluntary User Declarations 122 Synopsis 122 3.5. Public Policy and Infrastructure 123 Public Policy for a Publicly Owned Network 124 Public Policy for a Privately Owned Network 125 3.6. Summary 127 References 130 Page 12 Suggested Readings and Notes 133 Further Readings on Game Theory 133 Internet Resources 133 The Internet Networking Infrastructure 133 Domain Name Registration 134 MBONE (Multicast Backbone) 134 IETF IP Multicasting Proposals 135 Broadband Online Services 135 4 Quality Uncertainty and Market Efficiency 137 4.1. Economics of the Lemons Market 139 Price as a Signal for Quality 141 Remedies for the Lemons Problem 143 4.2. Information Channels in Electronic Commerce 145 Sellers Provide Product Information 145 Freeware, Shareware, and Other Promotions 148 Free Products Online 148 The Economics of Try-Outs 150 Third-Party Information 152 Retailers and Other Brokers 153 4.3. Quality and Intermediaries 155 Transactional Efficiencies 156 Intermediaries as Experts 158 Intermediaries as an Information Source 161 Intermediaries as Producers 162 4.4. Intermediaries and Contracts 163 Subcontracting Systems 164 Incomplete Contracts 166 4.5. Summary 169 References 170 Suggested Readings and Notes 171 Economics of the Lemons Problem 171 Repeat Purchases and Reputation 172 Page 13 Internet Resources 173 Internet Commerce 173 Internet and Economics 173 5 Economic Aspects of Copyright Protection 175 5.1. Economic History of Copyright 176 The Property Aspect of Copyright 178 The Authorship Aspect of Copyright 183 Public Interest 184 5.2. The Nuts and Bolts of Copyrights 186 Objects Covered by Copyright 186 Terms of Copyright 187 Works That Cannot Be Copyrighted 187 Specific Rights of Authors Granted by Copyright 189 Fair Use Doctrine 190 Other Intellectual Property Laws 191 5.3. Copyright Protection and Digital Products 192 Reproduction 192 Reproductions on the Internet 193 Economic Implications of Reproduction 195 Resale and Distribution 195 Resale and the First Sale Doctrine 196 Resale Prevention and Pricing 198 Content Control 200 5.4. Market Protection Through Business Strategies 202 5.5. Policy Implications 204 Copyright and Antitrust Concerns 205 5.6. Summary 207 References 209 Suggested Readings and Notes 210 Historical Development of Copyright Laws 210 Patents and Economics 211 Page 14 Internet Resources 211 Articles 211 Internet Copyright Sites 212 Texts of Copyright Laws 212 World Intellectual Property Organization (WIPO) Conference Resources 212 6 Signaling Quality and Product Information 213 6.1. Advertising on the Internet 214 Growth in Electronic Advertising 215 Types of Internet Advertising 217 Banner Ads 218 Selling Advertising to Consumers 220 Web Storefronts 222 6.2. The Economics of Advertising 223 The Economic Roles of Advertising 224 The Informational Content of Advertising 231 Information about Information Products 231 The Effect of Advertising on Price 234 Advertising and Product Differentiation 237 6.3. Other Strategies to Convey Product Information 239 Repeat Purchases and Reputation 239 Reputation Building in Electronic Commerce 240 Renting a Reputation 241 Shareware and Wasted Investments 242 Quality Guarantees for Digital Products 243 6.4. Marketing Strategies for the Internet 244 Myths and Popular Wisdom about Online Advertising 245 Broadcast versus Targeted Advertising 246 Push versus Pull Advertising 249 Advertisements as Commodities 251 Passive versus Active Marketing 252 Electronic Malls and Intermediaries 253 Page 15 Is Online Advertising Effective? 254 Providing Consumer Information 256 6.5. Summary 257 References 258 Suggested Readings and Notes 260 Advertising and Competition 260 Signaling 260 Internet Resources 261 Web Directory for Advertising 261 Popular Wisdom on Internet Marketing 261 Shareware Resources 262 7 Consumers' Search for Information 263 7.1. Consumer Searches and Economic Efficiency 263 Search Costs 265 Consumer Searches and Electronic Commerce 267 Digital Products and Consumer Searches 269 7.2. The Search Market and Intermediaries 270 Search Market Efficiency 271 Search Efficiency in Intermediaries 276 Search Efficiency in Informational Content 278 7.3. Search Engines on the Internet 280 Search or Surf? 281 Inadequacies of Search Engines 281 7.4. Market Efficiency In Various Information Sources 282 The World Wide Web 283 Web Searches 284 Gopher 285 Gopher Search 285 Anonymous
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