Effects of Electronic Markets on Negotiation Processes

Negotiation can be regarded as playing a game with certain rules. If the rules change, the game has to be played differently. Compared to traditional markets, electronic markets can have fundamentally different characteristics such as cost structure or the level of transparency. These differences have already stimulated the tremendous success of one breed of electronic market negotiations: auctions. But auctions offer only limited support for the negotiations that will be necessary in more differentiated markets for complex goods and services. This paper relates the implications of specific electronic market characteristics to the effectiveness of major types of negotiations. The analysis reveals why bidding protocols currently dominate bargaining protocols and suggests that future negotiation support beyond auctions should be based on integrative multilateral protocols

Buyer Commitment and Opportunism in the Online Market for IT Services

Companies increasingly outsource IT-related tasks using reverse auction mechanisms embedded into online marketplaces. However, a considerable proportion of auctions at these marketplaces do not result in a contract between buyer and supplier. Extant literature mostly refers to costly bidding and bid evaluation to explain this phenomenon. Another possible explanation is that because of the low entry barriers, buyers with a low commitment to exchange can use the marketplace solely for information gath-ering purposes such as price benchmarking and obtaining free consultations, having little or no intention to contract a supplier. We test this explanation by looking at how different types of costs incurred by the buyer during the sourcing process, are related to the outcome of reverse auctions in terms of contract award. We argue that higher levels of search, preparation and negotiation costs are associated with higher commitment to exchange and find that opportunistic behaviour does indeed play a part in the non-contracted projects, while committed buyers are more likely to enter into a contract with a supplier. The hypotheses are tested on a sample of 2,574 reverse auctions at a leading online marketplace for IT services and further verified across projects of different value and different levels of buyer experience. On the practical side, we recommend setting up entry barriers for buyers with a low level of commitment.IT Outsourcing;Online Markets;Opportunism;Reverse Auctions;Transaction Costs

Not just a "second order" problem in a wider economic crisis: systemic challenges for the global trading system

Reform of the multilateral trade regime is not simply a second order problem within a wider economic crisis. The completion of the Doha Round may be a second order question but the global trade regime faces a series of broader systemic challenges beyond the completion of the current negotiations. This paper identifies five challenges: (i) a marked reduction in popular support for open markets in major OECD countries; (ii) the stalling of a transition from one global economic equilibrium to another; (iii) a lack of clarity and agreement on the agenda and objectives for the WTO as we move deeper into the 21st century; (iv) the demand for fairness and justice in the governance of the WTO—the 'legitimacy' question and (v) the rise of regional preferentialism as a challenge to multilateralism. Failure to address these challenges will represent not only a fundamental question for the future of the WTO as the guarantor of the norms and rules of the global trade regime specifically, but also the ability to establish greater coherence in global economic governance overall when its need is arguably greater than at any time since the depression years of the 20th century inter-war period

An Empirical Analysis of the Determinants of Success of Food and Agribusiness E-Commerce Firms

E-commerce's value creation in agricultural and food markets will only occur to the extent that e-commerce firms exist throughout the supply chain. The problem is that e-commerce firms throughout the agricultural and food supply chain have faced a serious challenge in staying in business. Many have been forced to exit the market, and only a few have survived to develop into functional web-based businesses. The objective of this research study is to identify characteristics that are associated with successful e-commerce firms throughout the agricultural and food supply chain. Relevant e-commerce and agricultural e-commerce literature suggests several characteristics that influence the success for agricultural and food e-commerce firms. A limited-dependent variable technique, logistic regression, is used to relate websites' characteristics to their probability of survival.e-commerce, food chains, survival probability, logistical regression, Agribusiness,

An agent-based framework for selection of partners in dynamic virtual enterprises

Advances in computer networking technology and open system standards have made practically feasible to create and manage virtual enterprises. A virtual enterprise, VE, is usually defined as a temporary alliance of enterprises that come together to share their skills, core competencies, and resources in order to better respond to business opportunities, and whose cooperation is supported by computer networks. The materialization of this paradigm, although enabled by recent advances in communication technologies, computer networks and logistics, requires an appropriate architectural framework and support tools. In this paper we propose an agent-based model of a dynamic VE to support the different selection processes that are used in selecting the partners for a dynamic VE, where the partners of a VE are represented by agents. Such a framework will form the basis for tools that provide automated support for creation, and operation, of dynamic virtual enterprises

Structural Power and Emotional Processes in Negotiation: A Social Exchange Approach

This chapter focuses in the abstract on when and how repeated negotiations between the same actors foster positive feelings or emotions and, in turn, an affective commitment to their relationship. However, we have in mind applications to pivotal dyads within organizations and also to the emergence of friction” or stickiness” in market relations. Implicit in the idea that negotiations in pivotal dyads shape institutional patterns is the notion that repeated negotiations between the same two actors are likely to become more than instrumental ways for the particular actors to get work done. We suggest a simple process by which dyadic negotiations give rise to incipient affective commitments that make the relationship an expressive object of attachment in its own right. When such transformations occur, future negotiations are not just efforts to solve yet another concrete issue or problem that the particular actors face; they come to symbolize or express the existence of a positive, productive relationship. Commitments that have an emotional/affective component tend to make the exchange relation an objective reality with intrinsic value to actors. In Berger and Luckmann\u27s (1967) terms, the relation becomes a third force.

Transaction Streams: Definition and Implications for Trust in Internet-Based Electronic Commerce.

In this paper we analyze 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 search cost, allowing customers to choose among more providers (which ultimately reduces both the costs for the customer and the profits for the producer). In this paper we contend that electronic markets on the Internet have the opposite effect, resulting in our increase in the number of intermediators. We introduce transaction streams, which model how transactions are being conducted and help explain the types of new intermediators that are appearing on the Internet. We also describe mechanisms by which companies are exploring ways of extending transaction streams. To illustrate the model and validate our findings, we analyze transaction streams in the insurance industry and review associated concepts such as trust and brands.transactions; electronic markets;

Distributed interoperable workflow support for electronic commerce.

Abstract. This paper describes a flexible distributed transactional workflow environment based on an extensible object-oriented framework built around class libraries, application programming interfaces, and shared services. The purpose of this environment is to support a range of EC-like business activities including the support of financial transactions and electronic contracts. This environment has as its aim to provide key infrastructure services for mediating and monitoring electronic commerce.

A theoretical and computational basis for CATNETS

The main content of this report is the identification and definition of market mechanisms for Application Layer Networks (ALNs). On basis of the structured Market Engineering process, the work comprises the identification of requirements which adequate market mechanisms for ALNs have to fulfill. Subsequently, two mechanisms for each, the centralized and the decentralized case are described in this document. These build the theoretical foundation for the work within the following two years of the CATNETS project. --Grid Computing