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Home arrow Communication arrow How Digital Communication Technology Shapes Markets: Redefining Competition, Building Cooperation

My Take

What are the core values of the Internet and how do we protect them? DCT has precipitated adaptation and innovation on the inner margins, small and incremental. Past decisions have lingering effects whose implications unfold over time and impact the current environment, a phenomenon known as economic hysteresis [123]. The implication of this is waiting before acting. As more information is revealed over time, irreversible decisions can be made more effectively since some of the uncertainty is resolved. Adaptation and innovation itself present further challenges that must be responded to, in a cycle of learning and growth or competitive hysteresis.

So innovation from the edges, as Shane Greenstein [124] calls it, is a sharp survival tool. Rather than responding with massive changes, economic agents are taking baby steps as we ponder what values we want to protect and how we want to do so. How open do we want the Internet to be and how much autonomy do we want to relinquish to individual economic agents? A fragmented network economy with no coherent structure is self-destructing. Therefore, what kind of trade-off are we prepared to make between control and cohesion?

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