Discussion 1
A friction free economy is a hypothetical business environment where all expenses and limitations connected with transactions are non-existent.
For my research, I found two articles. Using the CSUF library search engine, I found an article titled “The Friction-Free Economy” written by John Case, and “Friction-Free Economy Rhetoric Holds a Time Bomb” written by Gary Chapman. I decided to use these two articles because they were written around the same time, and both have the same concept involving friction free economy. Since the articles were written in 1996, the times have changed drastically. In the two articles, both discuss how the internet will change the economy into a low-friction economy. An example stated in Chapman’s article, is that the internet will help buyers look online for refrigerators instead of going store to store.
Friction-free or low-friction economies tie in with supply and demand because the lower the friction is in an economy, the higher the competition. According to the articles, the internet (will) play a huge role in supply and demand. The supply will increase as friction decreases, not necessarily because of demand, but it is easier for competitors to enter the market. Case states, “Offer a distinctive something to your customer”. Nowadays, you can find the same product anywhere, but in order to succeed, companies must offer a service that is different or better compared to its competitors. However, in high friction markets, demand creates supply (how shopping for products was done before internet shopping).
Another concept that ties in with a friction-free economy, is the demand elasticity. The demand elasticity becomes more inelastic when the friction is higher, and more elastic when the friction is lower in an economy. In a friction-free economy, buyers can use the internet to quickly compare prices, read reviews, and purchase items. However, not all firms are affected the same. Even with the internet, expensive products such
For my research, I found two articles. Using the CSUF library search engine, I found an article titled “The Friction-Free Economy” written by John Case, and “Friction-Free Economy Rhetoric Holds a Time Bomb” written by Gary Chapman. I decided to use these two articles because they were written around the same time, and both have the same concept involving friction free economy. Since the articles were written in 1996, the times have changed drastically. In the two articles, both discuss how the internet will change the economy into a low-friction economy. An example stated in Chapman’s article, is that the internet will help buyers look online for refrigerators instead of going store to store.
Friction-free or low-friction economies tie in with supply and demand because the lower the friction is in an economy, the higher the competition. According to the articles, the internet (will) play a huge role in supply and demand. The supply will increase as friction decreases, not necessarily because of demand, but it is easier for competitors to enter the market. Case states, “Offer a distinctive something to your customer”. Nowadays, you can find the same product anywhere, but in order to succeed, companies must offer a service that is different or better compared to its competitors. However, in high friction markets, demand creates supply (how shopping for products was done before internet shopping).
Another concept that ties in with a friction-free economy, is the demand elasticity. The demand elasticity becomes more inelastic when the friction is higher, and more elastic when the friction is lower in an economy. In a friction-free economy, buyers can use the internet to quickly compare prices, read reviews, and purchase items. However, not all firms are affected the same. Even with the internet, expensive products such