THEORETICAL FOUNDATIONS
The seven chapters in Part II develop theoretical frameworks to analyze the Internet economy. Some of the contributions offer complementary perspectives but others are alternative takes on the economics of the Internet.
Gunter Knieps and Johannes M. Bauer outline elements of an industrial organization perspective on the Internet in Chapter 2. Using a framework grounded in the dynamic analysis of markets they develop basic economic concepts relevant for the Internet with an emphasis on all-IP networks. The authors examine the Internet from micro and macro perspectives with a particular emphasis on innovation in complementary technologies. Stephen J. Schultze and Richard S. Whitt in Chapter 3 offer a complementary perspective by conceptualizing the Internet as a dynamic, layered socio-technical system. Approaching the topic from evolutionary and complexity economics vantage points, this chapter develops a framework for understanding dynamic economic change and innovation in the Internet economy. Models based in the theory of complex adaptive systems hold considerable promise for future research. Volker Schneider and Johannes M. Bauer in Chapter 4 broaden these lenses in a different direction with an overview of approaches emerging from network science. This innovative body of research is particularly powerful in examining, theoretically and empirically, the highly interwoven economic and social processes unfolding on the Internet.The Internet has unleashed fundamental transformations of the organization of production in the commercial sector and also in the not-for-profit and gift economies. Three chapters address different aspects of these impacts. Yochai Benkler in Chapter 5 provides a comprehensive discussion of the role of peer production as an emerging new mode of production that exists in parallel and in competition with traditional forms of market production.
He examines the constitutive features of peer production, its economic importance as well as the diversity of motivation of participants and the governance of peer production systems. In Chapter 6 Carol Corrado and Bart van Ark examine the effects of the Internet on productivity and economic growth. In contrast to computers, whose effects on productivity did not show in statistics for a long time, the positive contribution of communications technology and especially broadband Internet is less contested and substantiated by empirical evidence. However, as the differentiated discussion shows, the effects of the Internet are not evenly spread across economic activities and some negative impacts can also be observed.Information goods and services form a core piece of the Internet. Their production, dissemination and consumption change compared to the offline world. Insights from cultural economics can help to understand these changes in creative industries, as Christian Handke, Paul Stepan and Ruth Towse explain in Chapter 7. Taste formation and supplier-induced demand, intrinsic motivation, decision-making under extensive uncertainty, and new forms of user-producer and user-user interaction are, for example, topics where cultural economics can contribute to a better comprehension of the Internet ecosystem. Nevertheless, there are also gaps and unfulfilled potentials for research on technological change in cultural economics, as the authors indicate in their contribution.
The final chapter in this section, Chapter 8, co-authored by Patricia Mazepa and Vincent Mosco, develops a critical, political economy perspective on the Internet. This brings otherwise largely ignored aspects into view, such as the emergence of a global poorly paid digital workforce and the power structures of information and communication markets. The implications of the Internet on labor markets, the organization of information production, and the role of political economy in academic research are all addressed.
Taken together, these chapters span a broad spectrum of theoretical and methodological approaches, ranging from mainstream economics to radical political economy. Each chapter reflects on the state of research, important contributions and open questions so that readers can develop their independent assessment of the uses and limitations of each of the frameworks.
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