Business-to-business electronic marketplaces: Joining a public or creating a private

✍ Scribed by Chrysovalantou Milliou; Emmanuel Petrakis

• Publisher: John Wiley and Sons
• Year: 2004
• Tongue: English
• Weight: 168 KB
• Volume: 9
• Category: Article
• ISSN: 1076-9307
• DOI: 10.1002/ijfe.234

✦ Synopsis

Abstract

We analyse a firm's incentives to create a private B2B e‐marketplace or to join a public e‐marketplace. In the former the firm incurs higher set‐up costs but lower quality investment costs due to closer supplier–buyer collaboration than in the public. In the latter, the firm's quality improvement may spillover to competitors. We show that a firm's incentives to create a private e‐marketplace are stronger, the closer is supplier–buyer collaboration, the higher are spillovers, and the larger is the buyer's profit share within the e‐marketplace. Our welfare analysis indicates that a firm's incentives do not always coincide with those of a social planner. Copyright © 2004 John Wiley & Sons, Ltd.