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E-Life after the Dot Com Bust pp 39–61Cite as

B2C e-commerce: a frictionless market is not in sight — arguments, empirics and policy implications

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Abstract

In our paper we challenge the widely held view that B2C (Business-to-Consumer) e-commerce markets are or at least tend to be frictionless, approaching the ideal-type frictionless market in microeconomic theory. The social consequences would be numerous, affecting the impact on consumers and on respective state policies. We discuss arguments for and against the assumption of a frictionless, highly competitive B2C e-commerce market and present the results of an empirical study on success factors in B2C e-commerce. In addition we provide a survey of empirical studies of the intensity of competition in B2C e-commerce. We argue that the intensity of competition is lower than widely expected and that the dot corn shakeout might further increase concentration in B2C e-commerce Finally, we discuss policy implications based on the theoretical and empirical analysis. We conclude that the rather technology-centred arguments for a frictionless market are outweighed by arguments and by empirical evidence against a frictionless market based on industrial economic considerations.

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Author information

Authors and Affiliations

  1. Research Unit for Institutional Change and European Integration, Austrian Academy of Sciences, Vienna, Austria

    Michael Latzer & Stefan W. Schmitz

  2. Oesterreichische Nationalbank, Vienna, Austria

    Michael Latzer & Stefan W. Schmitz

Authors
  1. Michael Latzer
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  2. Stefan W. Schmitz
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Editor information

Editors and Affiliations

  1. German Institute for Economic Research (DIW), Königin-Luise-Straße 5, 14195, Berlin, Germany

    Brigitte Preissl

  2. Faculty of Technology, Policy and Management Section Technology and Innovation, Delft University of Technology, Jaffalaan 5, 2628 BX, Delft, The Netherlands

    Harry Bouwman

  3. Department of Telecommunication, Michigan State University, 48824-1212, East Lansing, MI, USA

    Charles Steinfield

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Latzer, M., Schmitz, S.W. (2004). B2C e-commerce: a frictionless market is not in sight — arguments, empirics and policy implications. In: Preissl, B., Bouwman, H., Steinfield, C. (eds) E-Life after the Dot Com Bust. Physica, Heidelberg. https://doi.org/10.1007/978-3-662-11659-3_3

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  • DOI: https://doi.org/10.1007/978-3-662-11659-3_3

  • Publisher Name: Physica, Heidelberg

  • Print ISBN: 978-3-7908-2453-7

  • Online ISBN: 978-3-662-11659-3

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