Electronic Commerce and the Implications for Market Structure

Abstract

In recent years, it has been widely stated that electronic commerce will signify the dawn of a friction-free market (Gates, 1995). Structural changes in markets, such as disintermediation, would occur due to the impact of electronic trade and electronic information exchange. As argued by Sarkar, Butler and Steinfield (1995), these statements are oversimplified and exaggerated, because different outcomes are possible, such as cybermediation and re-intermediation. In order to clarify the issues concerning the implications of e-commerce for market structure, this paper attempts to validate the model developed by Sarkar et al., by applying the model to the art and antiques market. The implications of e-commerce depend on the choice to internalize electronic inter-organizational activities or outsource these activities to so-called cybermediaries. The emergence of new intermediary roles and actors is not always based on pure economic arguments. Of equal importance are the constraints imposed by the social and cultural embedding of intermediary roles. However, the precise impact on market structure cannot be explained exclusively by e-commerce. In this paper, it is argued that a better understanding of the evolutionary impact of e-commerce on existing market structures and intermediary roles is reached by taken into account both historical and regional perspectives.