By Gerard J Holzmann; American Telephone and Telegraph Company
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The digital economy should become in the long run a “coopetition” economy, with assemblers cooperating upstream, sharing high fixed costs in R&D and grouping their purchases of commodities, and opening themselves up to competition further down the line on the retail markets. To organize the interface between assemblers of final goods and producers of commodities, B-to-B marketplaces appear as an appropriate instrument: these electronic marketplaces operate as monopsonies, benefiting from scale effects generated by mass purchases.
The spread of digital networks may certainly affect markets where electronization is only partial; however, the impact can only be different from that expected in an integrated and global market. Secondly, digital networks are not mechanisms that substitute traditional commercial intermediaries in order to carry out the fiction of the Walrassian market. The existence of networks linking supply to demand does not ipso facto resolve the coordination problems brought about by the interaction of millions of agents (Brousseau ).
1 The “end-to-end” principle The Internet is not a network per se but a network of networks that relies on common standards allowing machines that process information digitally to “interoperate”. More precisely, Internet standards enable the totally decentralized interconnection of computerized networks. On the Internet there is no technical discrimination between the resources dedicated to the administration of the network and the terminals that process the information carried, as is usual in a traditional telecommunication network such as the telephone network, where terminals process information while the administrative equipment of the network – switches – connects information flow and transmission (Curien and Gensollen ).