Template-Type: ReDIF-Paper 1.0
Author-Name: Dolfsma, W.A.
Author-Name-Last: Dolfsma
Author-Name-First: Wilfred
Author-Person: pdo93
Title: Collective Consuming: Consumers as Subcontractors on Electronic Markets
Abstract: In this article, contrary to popular belief, it is argued on the basis of Transaction Cost Economics that consumers will become dependent subcontractors on electronic markets. Consumers invest time and effort building up a relation with a producer or e-tailer; an investment that is idiosyncratic. The producer or e-tailer only needs to invest in generic assets that enable him to automate the process of collecting and processing customer information she needs to differentiate products and discriminate prices. As subcontractors consumers face high switching costs and are thus dependent on producers or e-tailers. Virtual communities of consumers that organize countervailing power will not mitigate this tendency.
Creation-Date: 2005-04-03
File-URL: https://repub.eur.nl/pub/1932/ERS%202005%20020%20ORG.pdf
File-Format: application/pdf
Series: RePEc:ems:eureri
Number: ERS-2005-020-ORG
Classification-JEL: M, M13, M31, O32
Keywords: consumers, consumers as subcontractors, electronic, electronic markets, transaction cost
Handle: RePEc:ems:eureri:1932