Transaction innovation and the role of the firm

Abstract

Advances in computers and telecommunications and the development of the Internet have been applied to develop new transaction technologies that lower transaction costs. By lowering transaction costs, these changes in transaction technology make possible transaction innovation, that is, the development of new types of market transactions. Transaction innovation changes not only business methods and organizational design, but the content of transactions and the way that markets are organized. I consider the impact of transaction innovation on the role of the firm in various economic activities including market clearing, auction design, price adjustment, quality certification, and agency.

Citation

Spulber, D.F. (2002), "Transaction innovation and the role of the firm", Baye, M.R. (Ed.) The Economics of the Internet and E-commerce (Advances in Applied Microeconomics, Vol. 11), Emerald Group Publishing Limited, Leeds, pp. 159-189. https://doi.org/10.1016/S0278-0984(02)11031-5