An Exploratory Study of the Emerging Role of Electronic Intermediaries

Joseph P. Bailey
Technology, Management and Policy
Massachusetts Institute of Technology

Yannis Bakos
Graduate School of Management
University of California, Irvine

March 1977

forthcoming in the International Journal of Electronic Commerce


It is often argued that as electronic markets lower the cost of market transactions, traditional roles for intermediaries will be eliminated, leading to "disintermediation."  We discuss the findings of an exploratory study of intermediaries in electronic markets, which suggest that markets do not necessarily become disintermediated as they become facilitated by information technology.  We explore thirteen case studies of firms participating in electronic commerce and find evidence of certain new emerging roles for electronic intermediaries, including: aggregating matching suppliers and customers, providing trust, and providing inter-organizational market information.  Two specific examples are discussed in greater detail to illustrate an unsuccessful strategy for electronic intermediation (BargainFinder) as well as a successful one (Firefly).

KEYWORDS: electronic markets, intermediaries, Internet commerce, electronic data interchange

Copyright © 1997 by Joseph P. Bailey and Yannis Bakos