The Effects of Electronic Commerce on the Structure of Intermediation


  • Stefan W. Schmitz

    Corresponding author
    1. (Mag. (Vienna University of Economics), MSc (LSE), Dr. (Vienna University)) is a research fellow at the Research Unit for Institutional Change and European Integration (ICE) at the Austrian Academy of Sciences and a lecturer at the Vienna University of Economics. In his research he focuses on the digital economy, monetary economics, and the Austrian School of Economics. Past projects include numerous studies on telecommunication and mobile communication, and “Bankerwartungen und intertemporale Fehlkoordination” (dissertation, Vienna University, Dept. of Econ.).
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Contact address: Research Unit for Institutional Change and European Integration – ICE, Austrian Academy of Sciences, Postgasse 7/1/2, A – 1010 Wien. E-mail:


The paper questions the notion that the diffusion of electronic commerce will lead to disintermediation. Rather than interpreting intermediation as a single service it is pointed out that intermediaries can provide a number of services. The analysis based on the New Institutional Economics, Market Microstructure Theory, and Information Economics shows that the three intermediation services studied are, generally, not under threat by the diffusion of electronic commerce. The overall effects on intermediation depend on the relevance of these services relative to others (e.g., order processing), which are supposed to become obsolete.[1]