Business-to-Business Electronic Commerce
This paper provides an overview of the economic issues arising
in business-to-business (B2B) online commerce. Just as the industrial
revolution mechanized the manufacturing functions of firms, the
information revolution is automating their merchant functions.
We examine four types of potential productivity gains expected
from business-to-business (B2B) electronic commerce: cost efficiencies
from automation of transactions, potential advantages of new market
intermediaries, consolidation of demand and supply through organized
exchanges, and changes in the extent of vertical integration of
firms. We also describe the characteristics of early B2B online
intermediaries, including categories of goods traded, market mechanisms
employed, and ownership arrangements, and considers the market
structure of B2B e-commerce.
First version: June 2000
Last revised: November 1, 2000