Abstract
Electronic markets have become increasingly popular alternatives to traditional market forms over the past few years. This article explaines how electronic marketplace can be used to either create new markets or strengthen existing markets, and provides examples of the impact that alternative electronic commerce applications can have on firm competitiveness and market structure. The central claim of this article is that it is neccesary to analyze the impact of electronic market implementation on search costs, coordination costs and settlement costs in order to understand their impact on firms and markets. The article analyze several electronic market applications from the perspective of transaction costs, and presents general types of economic benefits that result from electronic market adoption. Social and organizational barriers to successful adoption of electronic markets are also discussed.
