chapter  15
16 Pages

Roles for Electronic Brokers

ByPaul Resnick, Richard Zeckhauser, Chris Avery

The information superhighway promises to facilitate the exchange of products. Broadly, we can think of all such exchanges as electronic commerce, even though some products, such as messages on computer bulletin boards, may be free, and physical transactions must be consummated elsewhere. (For example, a seller and buyer would exchange the product and payment by mail.) Most predictions about commercial opportunities on the information superhighway focus on the provision of information products, such as video on demand, and on new sales outlets for physical products, as with horne shopping. We believe that electronic brokers, as intermediaries between buyers and sellers, can help to create more efficient markets, both for information products and physical products. Most simply, they can reduce buyer search costs and arrange to pay for information that would not be provided without payment.