ISSN:
1573-7071
Source:
Springer Online Journal Archives 1860-2000
Topics:
Computer Science
,
Economics
Notes:
Abstract The explosive growth of the Internet has made possible an economic transformation in which commerce will become largely electronic. In this vision, the medium of communication and negotiation becomes a distributed network of computers equipped with robust, secure and trusted “cash” mechanisms. It is thus of paramount importance to design mechanisms that will ensure timely and reliable transactions in cyberspace. In this paper we present a methodology for quantitatively managing the risk and cost of executing transactions in a distributed network environment by exploiting an analogy with modern financial portfolio theory. We illustrate the methodology with several concrete examples under different pricing schemes, as well as with empirical measurements of Internet traffic.
Type of Medium:
Electronic Resource
URL:
http://dx.doi.org/10.1023/A:1019166225029
