Re-thinking the Concept of Surplus: Embracing Co-Creation Experiences in Economics

22 Pages Posted: 10 Jul 2013 Last revised: 14 Aug 2014

See all articles by Avik Chakrabarti

Avik Chakrabarti

University of Wisconsin - Milwaukee

Venkatram Ramaswamy

University of Michigan, Stephen M. Ross School of Business

Date Written: April 2014

Abstract

Economics has traditionally split consumers from producers by assigning them fixed roles. In the Internetworked economy as it is becoming, this is no longer true as value is increasingly jointly created among individuals, as a function of their co-creation experiences. We construct a framework that reconnects economics with value creation that goes beyond artifacts as the central unit of analysis, towards platforms of engagements of which artifacts themselves are only a part. Engagement platforms are now both the means and ends of value creation, and economic theory must take into account both the potential value generated to individuals through “production” experiences of co-creating artifacts (through coproduction engagement platforms), as well as co-creating “consumption” experiences (through coconsumption engagement platforms). We show how starting with joint value creation re-shapes our thinking about the nature of “surplus”, expanding traditional economic thinking about supply and demand toward a more convergent space of markets shaped by co-creation experiences.

Keywords: co-creation experience economics, co-creation possibilities set, co-creation possibilities frontier, co-creative surplus, gains from co-creation, principle of co-creative advantage

JEL Classification: B40, B41, D46

Suggested Citation

Chakrabarti, Avik and Ramaswamy, Venkatram, Re-thinking the Concept of Surplus: Embracing Co-Creation Experiences in Economics (April 2014). Ross School of Business Paper No. 1188, Available at SSRN: https://ssrn.com/abstract=2291475 or http://dx.doi.org/10.2139/ssrn.2291475

Avik Chakrabarti (Contact Author)

University of Wisconsin - Milwaukee

Bolton Hall 802
3210 N. Maryland Ave.
Milwaukee, WI 53211
United States

Venkatram Ramaswamy

University of Michigan, Stephen M. Ross School of Business ( email )

701 Tappan Street
Ann Arbor, MI MI 48109-1234
United States
734-763-5932 (Phone)
734-936-0279 (Fax)

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