Microproducts in a Digital Economy: Trading Small, Gaining Large

  • Authors:
  • Ram D. Gopal;R. Ramesh;Andrew B. Whinston

  • Affiliations:
  • University of Connecticut;School of Management, State University of New York at Buffalo;University of Texas at Austin

  • Venue:
  • International Journal of Electronic Commerce
  • Year:
  • 2003

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Abstract

The synergies between technological developments and market-exchange mechanisms hold considerable promise to unlock market inefficiencies and unleash a new era of digital commerce. Two powerful and fundamental techno-economic forces are already in motion in Internet commerce. One, micro-commoditization, is the ability of a producer to disaggregate a product or service into granular components and deliver it to consumers in a sequence. The other, micro-consumption, is the ability of users to consume such components over time to satisfy a specific need. These emerging phenomena are likely to revolutionize trade practices in the digital world. A model of the interactions among the underlying components of this emerging market structure is developed that envisions the consequents of their behavior on digital markets and consumer behavior, and derives a visionary framework for micro-product market structures of the future.