Modeling the Web Economy: Web Users and Goods

Abstract:     
An increasing amount of research papers is devoted in modeling Web functions. This effort is coming from many diverse disciplines like Computer Science, Economics, Mathematics, Social studies and others. At this stage, a set of definitions concerning the basic Web functions is needed in order to elaborate a more fruitful interdisciplinary dialogue about the Web. The objective of the present paper is to contribute towards a common understanding of the economic behavior in the Web. Existing analysis of network goods is insufficient for the Web because does not account for the drastic effects of the Editors’ function on the Web network and does not incorporates in the demand and supply of a network good the distinctive characteristics of digital goods. Respectively, digital goods underestimate the network structure of the Web. Web goods (WGs) are introduced as payoff-relevant bit strings with an assigned URI that affect the utility of Users. Their market value stems from the information they are composed from and a specific part of it, the hyperlinks, which facilitates navigation over a network of WGs. Contrastingly, to information’s and knowledge’s controversial definitions, WGs qualify as commodities. Users are partitioned to Navigators and Editors of WGs. Navigators are consuming information by navigating the Web and Editors are producing WGs by creating, updating or deleting online content and links. Navigation creates traffic streams for Editors, which is transformed to income mainly through advertising. Finally, the economic aspect of User’s functions is incorporated into a more general framework of Web functions.

Number of Pages in PDF File: 6

Keywords: Web goods, Web’s quad-graph, Navigators, Editors, Aggregators, Platforms, Reconstructors

JEL Classification: L81, L86, M20

Accepted Paper Series