(Tuesday, 3rd May 2005)
It was initially thought that the Internet, through lowering transaction costs, would naturally lead to a greater efficiency of both markets and hierarchies, i.e . to more fluid relationships across economic agents, to a better matching of supply and demand, to a reduced price dispersion and to a better managerial performance. Such optimistic expectations relied upon the simplistic belief that the traditional business models would migrate towards Internet without major changes, except for improvement. However, that simple transposition did not actually take place: e-commerce does not look like an online version of physical commerce, no more than intranets do substitute to management routines nor to informal talking around the coffee machine…
Original models emerged, based on a new kind of relationships between individuals. What is growing the faster on the Web is not the B2B nor the B2C as expected, but rather the C2C, i.e. inter-personal exchanges. Online communities developed indeed and many processes, such as e-commerce, open source software provision or collaborative work within firms, use those communities as an underlying essential social infrastructure. We shall investigate how the Internet transforms in depth markets and hierarchies, mainly by building up new structures for social interaction, the traditional communication channels, i.e. mass medias and social networks, being challenged and extended by online communities, a new institutional framework at the core of the economy of knowledge.
