Microproducts in a Digital Economy: Trading Small, Gaining Large

Ram D. Gopal, R. Ramesh, and Andrew B. Whinston
International Journal of Electronic Commerce,
Volume 8, Number 2, Winter 2003-4, pp. 9.

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.

Key Words and Phrases: market structure, micro-commoditization, micro-products, unbundling.