B2b and the Transaction Costs Paradigm

31 Pages Posted: 3 Jul 2001

See all articles by Pierluigi Sabbatini

Pierluigi Sabbatini

Government of the Italian Republic (Italy) - Italian Competition Authority

Date Written: June 26, 2001


Business to Business (B2B) causes a significant contraction of transaction costs. According to the Coase paradigm we would thus expect a deverticalization of the industry and broader scope for anonymous market mechanisms. In reality, such expectations are not fully borne out by the facts. When the industrial structure is concentrated the B2B generally loses its independence, and is owned by the firms which most contribute to its development, e.g. the ones able to bring the liquidity to it. The B2B governance mechanism established by these firms gives hierarchical mechanisms a role which they do not usually play in deep, anonymous markets.

Keywords: Transaction costs, vertical integration, electronic commerce, market intermediaries, vertical competition

JEL Classification: D23, L22, L42, L81, L86

Suggested Citation

Sabbatini, Pierluigi, B2b and the Transaction Costs Paradigm (June 26, 2001). Available at SSRN: https://ssrn.com/abstract=274974 or http://dx.doi.org/10.2139/ssrn.274974

Pierluigi Sabbatini (Contact Author)

Government of the Italian Republic (Italy) - Italian Competition Authority ( email )

Piazza Verdi 6/a
00187 Roma, 00198
0039 0685821369 (Phone)
0039 0685452369 (Fax)

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