An Analysis of the Reengineering of Intermediation by Electronic Commerce

Abstract

Efficiency arguments explain why commercial intermediaries exist and will continue to be involved in the exchanges despite the spread of digital networks. Commercial intermediaries provide producers and consumers with a set of information, logistic, securization and insurance (and liquidity) services. By bundling these services and by dedicating assets and learning capabilities to their production, commercial intermediaries enable to economize on transaction costs. Digital network per se cannot enables transacting parties to benefit from such efficient providers of intermediation services. Rather than establishing direct relationships among producers and consumers, the Internet will support a re-organization of existing intermediation chains, because traditional intermediaries will reinforce their ability to provide these service by using ITs. The analysis of the role of commercial intermediaries thus leads to a better understanding of the futures of e-Commerce. In turn, e-Commerce provides New-Institutional Economics with a stimulating case to analyze the economics of commercial intermediation