Handbook on the Economics of the Internet
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Handbook on the Economics of the Internet

Edited by Johannes M. Bauer and Michael Latzer

As the single most important general purpose technology of recent times, the Internet is transforming the organization, competitive structure and business models of the private, the public and non-profit sectors. In 27 original chapters, leading authors discuss theoretical and applied frameworks for the study of the economics of the Internet and its unique economics as a global information and communications infrastructure. They also examine the effects of the Internet on economic transactions (including social production, advertising, innovation, and intellectual property rights), the economics and management of Internet-based industries (including search, news, entertainment, culture, and virtual worlds), and the effects of the Internet on the economy at large.
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Chapter 2: The industrial organization of the Internet

Günter Knieps and Johannes M. Bauer


Outlining the elements of an industrial organization of the Internet requires an operational delineation of its boundaries and reliance on theoretical frameworks appropriate to its rapid pace of change. We respond to the first challenge by examining the Internet as a multi-layered socio-technical system. Embracing an inclusive perspective of the entire Internet ecosystem we differentiate, where appropriate, network infrastructure from applications and services based on this infrastructure. In addition, we analyze the emerging overall economic properties of the Internet. The conceptual challenges are addressed by grounding our approach in the economics of technologically dynamic industries with rapidly evolving markets.

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