Economic models of the Internet

The business models of the Internet

In the classical definitions and meanings of the market, very often reference is made to a physical and immaterial place at the same time, where supply and demand tend to reach a point of equilibrium, through the exchange of information between the parties. With respect to this definition, the Internet has played an important role with respect to the changes in existing markets or the possibility of new ones over time. The modification of traditional forms is for example the one that started with the introduction of E-Commerce tools where the supply side saw the Internet as the opportunity to exploit new distribution channels; at the same time, demand has changed, breaking down physical boundaries and allowing an exchange of information and goods on a global level. The Internet has also encouraged the creation of new markets and new players, through the changes that have been taking place in economic systems in general in recent years.

In this chapter we will analyze the Internet markets from the point of view of the economic theories that insist on the Intermediary and Content layers as the most representative of the new economy.

In particular, we will try to capture:

  • the elements of traditional economic theories that acquire an amplified importance in the analysis of Internet markets
  • the importance of economic theories on multi-sided markets on the Internet
  • the economic impacts of the Internet
  • the dynamics and structure of Internet markets referring to the theories of new markets and theories of markets designed “at the table”
  • the specific elements of Internet markets compared to traditional markets
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