Gift Economy

In essence, e-commerce is comprised of two major economies; the commodity-economy and the gift-economy. Veale and Barbrook refer to these economies as the "Free and the Fee", where the Free represents the Gift-economy and the Fee represents the commodity-economy (Veale, 2005, Barbrook, 2005).

The internet was founded on the basis of sharing information by cultural groups such as software developers, academics and scientists (Barbrook, 2005, Lessig, 2004) well before commerce entered the Internet economy. And it is argued by many commentators that it still exists today but has signifincantly evolved with the advent of e-commerce.


The gift-economy distinguishes itself from the commodity-economy in that it "is not based on monetary exchange, rather things and services are provided out of a sense of community spirit and responsibility" (Allen, 2012). Likewise, on the Internet, the gift economy is characterised by the exchange of goods and services for non-monetary or voluntary payments that mutually benefit the giver and receiver of the gift (Veale, 2005). Open Source Software and the free sharing of content are exchange examples of the gift economy on the Internet (Barber, 2005). Both Veale and Barber state that within the economy of the Internet, the gift-economy and the commodity-economy "co-exist in symbiosis", meaning whilst very different, they both depend on and reinforce each other in e-commerce (Barber, 2005, Veale, 2005). eBay is an example of an e-commerce business that particpates in both the gift and commodity economies.

How eBay contributes to the gift economy.

Veale states there are three fundamental principles of the gift economy in e-commerce. These are:

  1. exchange in the Internet gift economy facilitates reciprocity
  2. reciprocity in the form of intangible rewards, and
  3. intangible rewards leading to the tangible.

eBays presence in the gift economy is signified by their "Gift Center" that is accessed via their US sites home page at Within the gift centre, members can add items to their wish list, personalise gift cards for friends and families, browse a suggested gift guide and co-ordinate group gifts. Additionally, through their community based forums, eBay members contribute to the gift economy through seller ratings and via their open source marketplace, they provide public developers access to their platform to build custom interfaces and functionality.

eBay's exchange in the Internet gift economy facilitates reciprocity

By developing and publishing their application on the Internet at not cost, eBay has facilitated reciprocity in the form of a gift, providing members and non-members a space to browse and interact without necessarily the exhange of intangible or tangible rewards. Additionally, through the community forums and answer centre, members and non-members can gain access to all kinds of information withour ever transacting on the site.

eBay's reciprocity in the form of intangible rewards

eBay demonstrates reciprocity in the form of intangible rewards through their community forums and open source marketplace. The intangible rewards take the form of "reputation, anticipated reciprocity and self-esteem" (Veale, 2005). For example, a developer that contributes code to their application is recognised for their contribution, thus enhancing their reputation and self-esteem. In their community forums, members have the ability to rate the credibility of merchants and sellers. Where a merchant and or seller has a high rating, their reputation is enhanced. Conversely, where a seller or merchant is rated poorly, their reputation is tarnished. In addition, self-esteem of members can also be affected by the satisfaction members receive contributing and sharing information through the discussion boards (Veale, 2005).

eBay's intangible rewards leads to tangible rewards
The eBay wishlist and gift cards are examples of an intangible anticipated reciprocity rewards that lead to tangible rewards. Members add items to their wish list, informing sellers of potential goods they wish to acquire. While, reciprocity may not be direct, and in fact the transaction may never transpire, the primary aim of this 'gift' is to facilitate a monetary exchange. Furthermore, the gift cards available, whilst members can choose the type of the gift card they purchase as a 'gift' for family and friends, the gift cards can only be used to purchase products from their site and they also have pre-determined amounts. Again, reciprocity may be delayed, there purpose is to invoke a monetary tangible reward.

Allen, Matthew (2012) Gift Economy, The Spirit of Giving Lecture, retrieved from
Barbrook, R. (2005). The Hi-Tech Gift Economy. First Monday. Originally published in 1998, republished in 2005 with additonal comments by the author. retrieved from
Lessig, L. (2004). Us, Now in Free Culture: How Big Media Uses Technology and the Law to Lock Down Culture and Control Creativity. The Penguin Press. (pp. 276 - 286) retrieved from
Veale, K. (2005 December 5). Internet gift economies: voluntary payment schemes as tangible reciprocity. First Monday, special issue #3. retrieved from
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