Economics 101: supply and demand models for the Internet user experience

Internet Research

ISSN: 1066-2243

Article publication date: 1 December 2003


Schwartz, D.G. (2003), "Economics 101: supply and demand models for the Internet user experience", Internet Research, Vol. 13 No. 5.



Emerald Group Publishing Limited

Copyright © 2003, MCB UP Limited

Economics 101: supply and demand models for the Internet user experience

Economics 101: supply and demand models for the Internet user experience

Consider the supply and demand model. It is the central model of classic economics, playing off the variables of price and quantity from the perspective of buyers and sellers. When the price/quantity being supplied by sellers meets the price/quantity demanded by buyers, we are in equilibrium.

The Internet user experience is a derivative of many different variables. On the site-side we need to consider design, flow, features and functions, and performance. On the user-side, demographic characteristics, experience, sophistication and expectation all play a part. Modeling these two competing forces is not unlike economic analysis in which buy-side or demand characteristics are modeled against sell-side or supply characteristics. The time has come, perhaps, for a similar approach to analyzing the interplay between Web site and Web user, or Internet-experience supplier and Internet-experience consumer.

There is a growing body of literature that posits, tests, and analyses models for each side. In this issue of Internet Research we add to that knowledge base from both sides. On the site or supply side are contributions by van der Merwe and Bekker, "A framework and methodology for evaluating e-commerce Web sites", and by Taylor, Wade and England, "Improving Web design through normalization".

Representing the user or demand-side we have Calisir's analysis of "Web advertising vs other media", Stoel and Lee's approach to "Modeling the effect of experience on student acceptance of Web-based courseware", and Wolin and Korgaonkar with a look at "Web advertising: gender differences in beliefs, attitudes, and behavior". Yano and Seo expand on broader cultural impacts on user experience by examining "Conflicts among Net news participants and cultural background".

The question that remains, however, is can we develop some form of useful supply-demand curve model that will help us find an equilibrium in matching the demands of the user with the supply of the Web site? The field of economics has managed to do so by embracing a wide range of world-simplifying assumptions. The problem, of course, is that we are very far away from reducing our modeling environment to two variables such as price and quantity, or speed and information value, or experience and acceptance.

David G. Schwartz