BU415 Lecture Notes - Lecture 6: Open Standard, Sunk Costs, Grid Computing
Document Summary
Digital goods economic characteristics: high production costs, negligible replication costs, negligible distribution costs. Info isn"t the carrier: sunk costs, significant risk in producing information goods, no natural capacity limits, not consumed by use, experience good. Characteristics of internet: distributed ownership, different portions of the internet are owned by different entities, multiplicity of devices. Internet consists of millions of smaller digital networks, a collection of digital devices (nodes: open standards, agreed upon set of rules or conventions governing communication among internet nodes are freely available to everyone. Internet is rapidly evolving: network and grid computing, wired and wireless connections of a range of intelligent devices. Network economics: how can value in networks be created, value in scarcity, value of a good is a function of its limited availability, value in plentitude, network effect. Network types: physical networks, nodes connected by physical links (railroads, telephone lines, virtual networks, connections between network nodes that are intangible and invisible (skype, ebay)
