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The effects of business-to-business e-commerce on transactions costs

Garicano, Luis and Kaplan, Steven (2001) The effects of business-to-business e-commerce on transactions costs. Journal of Industrial Economics, 49 (4). pp. 463-487. ISSN 0022-1821

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Abstract

This paper studies transaction costs changes arising from the introduction of the Internet in transactions between firms. We divide transaction costs into coordination costs and motivation costs. We classify coordination efficiencies into three categories: process improvements, marketplace benefits, and indirect improvements. For motivation costs, we focus on informational asymmetries. We apply this framework to internal data from an Internet-based firm to measure process improvements, marketplace benefits, and motivation costs. Our results suggest potentially large process improvements and marketplace benefits. We find little evidence that informational asymmetries are more important in the electronic marketplace than in the existing physical ones.

Item Type: Article
Official URL: http://www.wiley.com/bw/journal.asp?ref=0022-1821
Additional Information: © 2001 John Wiley & Sons, Inc
Library of Congress subject classification: H Social Sciences > HD Industries. Land use. Labor
Sets: Research centres and groups > Managerial Economics and Strategy Group
Departments > Management
Research centres and groups > Centre for Economic Performance (CEP)
Rights: http://www.lse.ac.uk/library/usingTheLibrary/academicSupport/OA/depositYourResearch.aspx
Date Deposited: 06 Nov 2009 11:06
URL: http://eprints.lse.ac.uk/25580/

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