Edited by Johannes M. Bauer and Michael Latzer
Chapter 14: Internet architecture and innovation in applications
The Internet’s original architecture – its technical inner structure – was based on three design principles: the layering principle and two versions of the end-to-end arguments. Over the past years, the Internet’s architecture has been changing in ways that deviate from the Internet’s original design principles. Some of these changes are driven by network providers’ desire for more profit; some changes are the reaction to technical challenges the Internet is facing. This chapter examines how deviations from the broad version of the end-to-end arguments affect the economic environment for innovation in Internet applications, content, and services and the overall amount and quality of application innovation that will occur. It uses a general approach to studying the architecture of complex systems named ‘architecture and economics’. Architecture is understood as one of several constraints on human behavior and economic theory (broadly defined) is used to explore the effects of these constraints.
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