Munich Personal RePEc Archive

Frictionless economy and its implementation in real world

Yang, Yu (2011): Frictionless economy and its implementation in real world.

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Abstract

Frictionless economy is the new concept emerged from late 90s1. Its core idea is to remove the time both suppliers and customers spend on the trial and error on the price. So the markets always perform on the equilibriums. So markets can work in the perfect efficiency. But due to the various reasons, frictionless economy is rarely seen in the real world. The most common reason is lack of information. In last decade, the rise of internet and wide uses of IT technologies within businesses made the collection of information to be easier. Such trend renews people’s interesting on the frictionless economy. In this paper, we examine how exactly frictionless economy works and various reasons to prevent it to happen. We also suggest several solutions allow people to implement the frictionless economy in the real world if the only reason prevent them to have it is lack of information.

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