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Topics of interest in the context of Future Internet Socio-Economics:

Pricing, value chains, and business models
Network neutralityUser identity and privacy
Regulation and governanceTrust and reputation
Peer-to-Peer content distribution models
Bandwidth marketsCustomer usage behaviour, customization
Universal Internet serviceCreative commons

More specific topics:

  • P2P barter trade mechanisms (e.g. Bittorrent)
  • Bandwidth trading mechanisms
  • Service providers going down the value chain (e.g. Google)
  • Resource allocation and provision in non-profit systems (e.g. PlanetLab)
  • Legislative and regulatory issues, governance, government
  • Business models for user generated content, Web 2.0
  • Economic traffic management for P2P applications
  • Accountability

Economic factors to be considered as inhibiting ICT deployment include the following:

  • misalignment of incentives
Where costs and benefits can be measured, some situations can show economic incentives which might play against further investment in ICT. The return on investment might not be clear.
Specifically for security economics, the quantification of the costs and benefits is an issue even more so (investment can benefit all actors irrespective whether an actor invests itself). The impact on OPEX is not clear for security investment. The effect of information asymmetry (the provider having all information of its systems has an incentive to hide security vulnerabilities and possible breaches to its customers)
  • time frame of risks and rewards
Specifically for security economics, the time frame to prepare against risks might be too long for an organization to justify investment in security (as long as they can not be blamed of negligence) or for managers to delay investment.
  • transaction costs. These costs raise with the number of parties to be involved
Specifically for security economics, for example, deployment of PKI –RA, CA, 3rd parties- comes with a high transaction cost due to the participation of several actors. The high cost is an economic deterrent to deployment.
  • network externalities or network effects. It affects negatively or positively the participants to a network. A large user base benefits old technology (but can hinder acceptance of new technology). Network externalities are also characterized by the chicken and egg situation where two vertically industries need to be launched at once in order to be successful.
  • other externalities.
Specifically for security economics, the action of one actor (e.g. ISP installing an antivirus) can benefit positively to other actors but also prevent them from investing (e.g. in more security) [Kunreuther & Heal].
  • end to end nature of the design of the IP protocol. The principle by which functions are implemented where they fit best encourages the implementation of security in the application layer. The need for change of the underlying nature of the internet would require anyway an involvement of many actors, thereby also raising the transaction costs to deploy a security solution.

The complexity of the economics comes also from the fact that several factors are intertwined.

General Aspects of Socio-Economics of Networking:

  • Study of the relationship between any sort of economic activity (here networking in the sense of Internet-based communications and telecommunications based on lower-level network/telco services as well as application-based services) and the social life of user (here, mainly addressing private customers of such services and providers offering such services).
  • Market of ISPs and Telcos
  • ISP peering agreements and/or transit contracts
  • Customer usage behaviors and selections of content
  • Investigation of emerging technologies and disruptive technologies, which effect the user/customer to provider relation
  • Investigation of (European) regulation for the e-services market and security regulations
  • Investigation of physical environment of e-services in terms of availability, world-wide vs. highly focused (cities), and dependability for commercial services
  • Determination (if possible) of the growth of GDP, providers’ revenue maximization, and customers’ benefits

Mindmaps: Mindmap 1, Mindmap 2

Socio-economic aspects of self-organized communities

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Page last modified on June 08, 2009, at 05:55 PM