Identifying Facilitators and Inhibitors of Market Structure Change: A Hybrid Theory of Unbiased Electronic Markets

The electronic markets hypothesis (EMH) in the information systems (IS) literature suggests that information technology (IT) will reduce coordination costs across firms, leading to marketbased forms of economic activity. With the advent of the Internet, we have seen a move to unbiased electronic markets. However, in some industries electronic hierarchies or biased markets predominate, contrary to the predictions of the impacts of IT suggested by the EMH. We present a hybrid theory to explain how moves to unbiased markets are facilitated and accelerated by IT. This is based on electronic markets and hierarchies theory, and the theory of market design. We explore how different forces and situational factors can inhibit the move to advanced forms of market-based organization. Together, these theories offer valuable insights to understand which forces will predominate with respect to whether a vertical market will be transformed to a biased electronic market or an unbiased electronic mark...

• Type: Conference
• Year: 2005
• Where: HICSS
• Authors: Nelson F. Granados, Alok Gupta, Robert J. Kauffman
• Keywords: Biometrics, Electronic Market, Electronic Markets Hypothesis, HICSS 2005, System Sciences, Unbiased Electronic Market