5 Recognizing Lock-In

Visionaries tell us that the Internet will soon deliver us into that most glorious form of capitalism, the “friction-free” economy. How ironic, then, is the event that will usher in the next millennium: the dreaded Year 2000 Problem, a testament to the enormous rigidities that plague the information economy.

We agree that the Internet will make shopping easier than ever, but much of the talk about friction is fiction. You don’t have to drive to the store to order a new computer, but your choices for the future will still be hemmed in by the selections you made in the past. Like it or not, in the information age, buyers typically must bear costs when they switch from one information system to another. Understanding these ...

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