The Microeconomic Impacts of E-Business on the Economy

26 Pages Posted: 21 May 2009 Last revised: 4 Sep 2014

See all articles by James E. Prieger

James E. Prieger

Pepperdine University - School of Public Policy

Daniel Heil

Stanford University - The Hoover Institution on War, Revolution and Peace

Date Written: May 20, 2009

Abstract

The adoption of e-business at the microeconomic level of retail, wholesale, and labor market transactions has an enormous impact on the performance of firms and the economic welfare of consumers and workers. This article reviews, in broad outlines, the economics of e-business, focusing on empirical research. The fundamental notion that e-business and adoption of ICT lowers the cost of transferring, storing, and processing information is used to organize the examination. E-business spheres of impact covered include B2C and B2B e-commerce, the labor market, and the productivity of firms. This article covers both the predicted impacts of e-business on the economy suggested by economic theory and evidence on their empirical magnitude, building a framework to under-stand why e-business has proliferated and what the economic benefits are. The article concludes with some of the new policy challenges accompanying the rewards from e-business in the economy, touching on issues of price discrimination, competition, and some disadvantages of new markets.

Keywords: e-commerce, e-business, B2C, B2B, productivity, disintermediation, price discrimination, price dispersion

JEL Classification: D24, J64, J41, L63, O33, J24

Suggested Citation

Prieger, James E. and Heil, Daniel, The Microeconomic Impacts of E-Business on the Economy (May 20, 2009). Available at SSRN: https://ssrn.com/abstract=1407713 or http://dx.doi.org/10.2139/ssrn.1407713

James E. Prieger (Contact Author)

Pepperdine University - School of Public Policy ( email )

24255 Pacific Coast Highway
Malibu, CA 90263
United States
3105067150 (Phone)
3105067494 (Fax)

HOME PAGE: http://sites.google.com/a/pepperdine.edu/jprieger/

Daniel Heil

Stanford University - The Hoover Institution on War, Revolution and Peace ( email )

Stanford, CA 94305-6010
United States

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