Economic Effects of Electronic Markets

transport industry;electronic markets;flower industry

Waarde en Winnaar; Over het ontwerpen van elektronische veilingen.

Rede, in verkorte vorm uitgesproken op vrijdag 28 juni 2002 bij de aanvaarding van het ambt van bijzonder hoogleraar aan de Faculteit der Bedrijfskunde, vanwege de Vereniging Trustfonds Erasmus Universiteit Rotterdam, met als leeropdracht Bedrijfskunde in het bijzonder Ontwerp van Elektronische Markten.

How Will Online Affiliate Marketing Networks Impact Search Engine Rankings?

In online affiliate marketing networks advertising web sites offer their affiliates revenues based on provided web site traffic and associated leads and sales. Advertising web sites can have a network of thousands of affiliates providing them with web site traffic through hyperlinks on their web sites. Search engines such as Google, MSN, and Yahoo, consider hyperlinks as a proof of quality and/or reliability of the linked web sites, and therefore use them to determine the relevance of web sites with regard to search queries. In this research we investigate the potential impact of online affiliate marketing networks on the ranking of advertisers’ web sites in search results. This article empirically explores how seven different affiliate marketing networks affect the rankings of the advertising web sites within web search engines. The field study followed intensively seven online affiliate marketing networks for twelve weeks after their launch. The results indicate that newly started affiliate networks effectively improve the rankings of advertising web sites in search engine results. Also, it was found that the effects of affiliate marketing networks on search engine rankings were smaller for advertising web sites operating in highly competitive markets. Another finding was that a growth in visitors coming from search engines was present as a result of the improvement of search engine rankings. Finally, the results indicate that cost-benefit metrics associated with affiliate marketing programs, such as the average marketing cost will decrease when the positive effects of affiliate marketing on search engine rankings are taken into account.Advertising;Hyperlinks;Online Affiliate Marketing Networks;Search Engine Rankings

Big data and disruptions in business models

There are many challenges to reaping the benefits of the newest, emerging technologies. If it were easy, every business would do it and competitive advantage would easily fade away. It is in fact extremely difficult and challenging for companies to create value with emerging technologies. Every year, Gartner, a respected consultancy company, reviews the newest, emerging technologies and uses its hype cycle concept to explain the path that technologies take. The cycle consists of five phases: (i) the technology trigger phase: the invention of new technology that happens in a research lab, usually at a university (most companies outsource their fundamental research to universities nowadays). (ii) the peak of inflated expectations phase: the technology is discussed by companies at conferences and in the press. There is a great deal of talk about the new technology, but no one has used it yet. R&D projects are launched. (iii) the trough of disillusionment phase: it turns out that the technology is not as useful as it was thought to be. (iv) the slope of enlightenment phase: here, the valuable fusion of business and technology is explored. (v) the plateau of productivity phase: it is clear how business can use the technology to create value. In Gartner’s (2019) emerging technologies hype cycle, technologies such as biorobots, augmented reality cloud, decentralized web, adaptive machine learning, nanoscale 3D printing, and 5G are reviewed and positioned in the first phases. Gartner expect that these technologies will reach the plateau of productivity within 5 to 10 years.Muitos são os desafios que impedem o aproveitamento dos benefícios das tecnologias emergentes mais recentes. Se fosse simples, todas as empresas o fariam, e a vantagem competitiva desapareceria facilmente. Na verdade, é extremamente difícil e desafiador para as empresas criarem valor com tecnologias emergentes. Todos os anos, a Gartner, empresa de consultoria respeitada, analisa as tecnologias mais recentes e emergentes e utiliza o seu conceito de ciclo de hype para explicar o caminho que as tecnologias tomam. O ciclo consiste em cinco fases: (i) a fase de ativação tecnológica: a invenção de novas tecnologias, que ocorre em um laboratório de pesquisa, geralmente em uma universidade (hoje em dia, a maioria das empresas terceiriza suas pesquisas mais importantes para as universidades); ii) a fase de auge das expectativas inflacionadas: a tecnologia é discutida pelas empresas em conferências e na imprensa. Fala-se muito da nova tecnologia, mas ninguém a utilizou ainda. São lançados projetos de P&D; iii) a fase de desilusão: verifica-se que a tecnologia não é tão útil quanto se pensava; iv) a fase de declive de esclarecimento: é explorada a valiosa fusão entre negócios e tecnologia; (v) a fase de patamar da produtividade: fica claro como as empresas podem usar a tecnologia para criar valor. No ciclo de hype das tecnologias emergentes da Gartner (2019), tecnologias como biorrobôs, realidade aumentada na nuvem, web descentralizada, aprendizado de máquina adaptativo, impressão 3D em nanoescala e 5G são revisadas e posicionadas nas primeiras fases. A Gartner espera que essas tecnologias atinjam o patamar da produtividade dentro de 5 a 10 anos

The five information technology blind spots of economists

On August 9, 2007, the European Central Bank (ECB) decided to organize a conference call with the twenty largest banks in Europe. The problem was that these banks were no longer lending each other money. Banks were in urgent need of money and as one of the bankers made it clear: “We need three things: we need cash, we need a lot, and we need it now” (NRC Handelsblad , 2012). The same day, the ECB started to inject 95 billion euro, followed the next day by the Federal Reserve System (FED) in the United States (US) with an injection of 24 billion US dollars. It was the first sign that something was going wrong. However, very few people understood the significance of it. [...

Leveraging Offshore IT Outsourcing by SMEs through Online Marketplaces

Following their larger counterparts, an increasing number of small firms outsource their IT tasks to lower cost offshore destinations. For small firms, however, offshore outsourcing is a difficult undertaking as it involves high transaction costs. Online marketplaces for IT services, which have recently become available to small firms, make offshore IT outsourcing more accessible and manageable, although differences in the marketplace design result in varying outcomes across the marketplaces. This has consequences for SME’s decision as to which online marketplace to use, because different markets may have different types of benefits and costs. This paper sets to analyze some of the similarities and differences between online marketplaces for IT services and their effects for small firms. First, we analyze if and how online marketplaces reduce small firms’ transaction costs in offshore IT outsourcing. Second, we examine the effects of market entry barriers on outcomes of online marketplaces and their implications for small firms. The results indicate that online marketplaces for IT services do reduce transaction costs for small firms in offshore outsourcing across ten specific market processes. More surprising, however, is the finding that the lower market entry barriers for suppliers result in lower prices for buyers without compromising other aspects of market performance.Offshore IT Outsourcing;Online Market;Process-Stakeholder Analysis;Reverse Auction

Portfolios of Exchange Relationships: An Empirical Investigation of an Online Marketplace for IT Services

Small firms face distinct problems and opportunities when procuring IT resources. Whereas previous work focused at the level of firm or buyer-supplier dyad, we address portfolios of buyer-supplier relationships at an online marketplace for IT services. Using the portfolio approach, we develop a buyers taxonomy and analyze properties of resulting clusters.Our investigation reveals four clusters of buyers with distinct mixes of long-term and short-term supplier relationships. Although reverse auctions are found to be associated with short-term relationships and negotiations support long-term relationships, buyers in different clusters use the two mechanisms in combination to a different extent.Performance;Buyer-supplier relationships;IT services;Online markets;Outsourcing;Reverse auctions

Choosing between Auctions and Negotiations in Online B2B Markets for IT Services: The Effect of Prior Relationships and Performance

The choice of contract allocation mechanism in procurement affects such aspects of transactions as information exchange between buyer and supplier, supplier competition, pricing and, eventually, performance. In this study we investigate the buyer’s choice between reverse auctions and bilateral negotiations as an allocation mechanism for IT services contracts. Prior studies into allocation mechanism choice focused on factors pertaining to discrete exchange situation, such as con-tract complexity or availability of suppliers. We broaden the research by focusing on buyers’ past exchange relationships with vendors. Based on the literature on the economics of contracting and agency theory, we hypothesize that prior re-peat interaction with vendors favors the use of negotiations over auctions in the next transaction, while the need to explore the marketplace due to buyer’s inexperience or dissatisfaction with vendor’s performance in the most recent project leads to the use of auctions instead of negotiations. We find support for these hypotheses in a longitudinal dataset of 2,081 IT projects realized by 91 repeat buyers at a leading online services marketplace over a period of eight years. Taken together, the results show that analyzing B2B auctions and negotiations should move beyond analyzing discrete instances and instead analyze them in the context of the individual firm’s history and supplier strategy.outsourcing;IT services;online marketplace;reverse auctions

The five information technology blind spots of economists

On August 9, 2007, the European Central Bank (ECB) decided to organize a conference call with the twenty largest banks in Europe. The problem was that these banks were no longer lending each other money. Banks were in urgent need of money and as one of the bankers made it clear: “We need three things: we need cash, we need a lot, and we need it now” (NRC Handelsblad , 2012). The same day, the ECB started to inject 95 billion euro, followed the next day by the Federal Reserve System (FED) in the United States (US) with an injection of 24 billion US dollars. It was the first sign that something was going wrong. However, very few people understood the significance of it. [...

Web Auctions in Europe

This paper argues that a better understanding of the business model of web auctions can be reached if we adopt a broader view and provide empirical research from different sites. In this paper the business model of web auctions is refined into four dimensions. These are auction model, motives, exchange processes, and stakeholders. One of the objects of this research is to redefine the blurry concept of the business model by analyzing one business model, the web auction model. We show in this research the complexity and diversity of factors contributing to the success of the web auction model. By generalizing the results to the level of business model we also show how complex and diverse business models can be. Motivated by the lack of empirically grounded justification for the mixed business results of web auctions, this paper adopts a qualitative approach that includes telephone interviews with web auctions developed in different European countries.exchange processes;stakeholders;Web auctions