Thesis #18

The free market was always an illusion. In Cyberspace it’s a fraud.

In the early days of the Web, people thought that because a competitor was always “just one click away” it would usher in an era of ‘frictionless’ markets and perfect competition. No more “markets for lemons”.

Instead what we got was virtual competition with markets guided not by Adam Smith’s ‘invisible hand’ but by opaque price-setting algorithms.

Further reading

Arlei Ezrachi and Maurice Stucke, Virtual Competition: The Promise and Perils of the Algorithm-Driven Economy, Harvard, 2016. Amazon UK:

George Akerlof, “The Market for ‘Lemons’: Quality Uncertainty and the Market Mechanism”, The Quarterly Journal of Economics, Vol. 84, March 2008.

Michael Eisen, “Amazon’s $23,698,655.93 book about flies”, 22 April 2011,

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