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Journal of Information Technology

Document Type

Research Article

Abstract

This paper analyses how transactions related to the exchange of goods and services are being performed on the Internet. The adoption of electronic markets in an industry has a disintermediation potential because it can create a direct link between the producer and the consumer (without the need for the intermediation role of distributors). Electronic markets lower the searches cost allowing customers to choose between more providers. This ultimately reduces both the costs for the customer and the profits for the producer. In this paper it is contended that electronic markets on the Internet have the opposite effect, resulting in an increase in intermediators. It introduces transaction streams which model how transactions are being conducted and helps explain the types of new intermediators that are appearing on the Internet. The mechanisms by which companies are exploring ways of extending transaction streams are also described. To illustrate the model, the paper briefly analyses transaction streams in the insurance industry and provides examples related to confidence in electronic commerce.

DOI

10.1177/026839620001500102

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