ABSTRACT
Internet is a global computer network, and economics is the art and science of analysing production, distribution, and consumption of scarce resources by the society in a cost effective manner. Thus Internet economics is the study of interplay of human behavior, economics, and the Internet as scarce capital. Economics is initially defined in this chapter in set-theoretic language. Basics of Internet technology, costs, and pricing; and a qualitative economic model of the Internet are next briefly outlined. The chapter aims to study the interaction between Internet technology, economics, and users. Technology and economics are equally responsible for the evolution of the Internet, which in turn satisfy the demand of the users. It is quite challenging to do a top-down and comprehensive study of Internet economics. Economics depends upon technology, psychology, and perhaps metaphysics. In order to understand the economics of the Internet, it is fruitful to study the structure of the Internet.
