A Transportation Telecommunication Media Split Model Considering Complexity of Interaction

This chapter conducted a quantitative analysis of business information interactions among prefectures in Japan. First, the paper considered characteristics of telecommunication and face-to-face contact. In order to deal with substitutability and complementarity among interaction media, the qualitative complexity of interaction should be taken into account. One episode of face-to-face contact includes several bi-directional communications, marking this type of contact appropriate for exchanging complex information. On the other hand, one episode of telecommunication can usually transmit only uni-directional information. In other words, substitution between face-to-face contact and telecommunication is not one to one, but one to many. The substitution rate depends on the complexity of the information exchanged. Based on the cost-minimization principle, and comparing the substitution rate with the cost ratio between one episode of face-to-face contact and one episode of telecommunication, the interaction medium is chosen. Then the paper suggested a media split model formulating the above mechanism and conducted an empirical analysis of business interactions among prefectures in Japan. The final section presents further observations.