Surfing as a real option

One of the predominant modes of accessing information in the World Wide Web consists in surfing from one document to another along hypermedia links. We have studied the dynamics of Web surfing within an economics context by considering that there is value in each page that an individual visits, and that clicking on the next page assumes that the information will continue to have some value. Within this formulation an individual will continue to surf until the expected cost of continuing is perceived to be larger than the expected value of the information to be found in the future. This problem is similar to that of a real option in financial economics. We consider the options viewpoint as a descriptive theory of information foraging by Internet users, and we show how it leads to a kind of “law of surfing” which has been verified experimentally in several large independent datasets. But the real options perspective, which is by now a well-established field in financial economics, may also provide a rich normative model for designing rational Internet agents.