The Effects of Business-to-Business E-Commerce on Transaction Costs

28 Pages Posted: 10 Dec 2000

See all articles by Luis Garicano

Luis Garicano

Centre for Economic Policy Research (CEPR); IE Business School

Steven N. Kaplan

University of Chicago - Booth School of Business; National Bureau of Economic Research (NBER); European Corporate Governance Institute (ECGI); University of Chicago - Polsky Center for Entrepreneurship

Multiple version iconThere are 2 versions of this paper

Date Written: July 2001

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.

JEL Classification: D2, D4, L1

Suggested Citation

Garicano, Luis and Garicano, Luis and Kaplan, Steven Neil, The Effects of Business-to-Business E-Commerce on Transaction Costs (July 2001). Available at SSRN: https://ssrn.com/abstract=252210 or http://dx.doi.org/10.2139/ssrn.252210

Luis Garicano

Centre for Economic Policy Research (CEPR)

London
United Kingdom

IE Business School ( email )

Calle María de Molina, 11
Madrid, 28006
Spain

Steven Neil Kaplan (Contact Author)

University of Chicago - Booth School of Business ( email )

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Chicago, IL 60637
United States
773-702-4513 (Phone)
773-702-0458 (Fax)

National Bureau of Economic Research (NBER)

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European Corporate Governance Institute (ECGI) ( email )

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Belgium

University of Chicago - Polsky Center for Entrepreneurship

Chicago, IL 60637
United States

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