Electronic Commerce and the Implications for Market Structure

The Example of the Art and Antiques Trade

Authors

  • Thomas Adelaar

    1. Studied International Economics and Economic Geography at Utrecht University. He currently works at the Telematica Instituut, a technological institute in Enschede, the Netherlands, as research assistant. He is involved in different projects, such as GigaPort Applications, which deals with new content-based services using greater bandwidth of the next generation of Internet. He also does a Ph.D. on e-commerce. His research interests include geographical factors concerning e-commerce, electronic auctions, dotcom entrepreneurs, the implications of e-commerce on market structure and intermediaries, and selling strategies on the Internet.
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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.

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