Commerce depends on buyers and sellers fulfilling their contractual obligations; mechanisms inducing such performance are essential to well-functioning markets. Internet-enabled reputation mechanisms that collect and disseminate consumer feedback have emerged as prominent means for inducing...

Online reputation mechanisms are emerging as a promising alternative to more established mechanisms for promoting trust and cooperative behavior, such as legally enforceable contracts. As information technology dramatically reduces the cost of accumulating, processing and disseminating consumer...

Includes bibliographical references (p. 17-18).

Information technology has generally reduced search and coordination costs. Ceteris paribus, this should lead firms to increase the number of suppliers with which they do business. However, there is little evidence of an increase in the number of suppliers used in the past few years. On the...

As search costs and other coordination costs decline, theory predicts that firms should optimally increase the number of suppliers with which they do business. Despite recent declines in these costs due to information technology, there is little evidence of an increase in the number of suppliers...

Information systems can serve as intermediaries between the buyers and the sellers in a market creating an "electronic marketplace" that lowers the buyers' cost to acquire information about seller prices and product offerings. As a result, electronic marketplaces reduce the inefficiencies caused...

A cornerstone of the law and economics approach to standard form contracts is the Òinformed minorityÓ hypothesis: in competitive markets, a minority of term-conscious buyers is enough to discipline sellers from offering unfavorable boilerplate terms. The informed minority argument is widely...

We analyze pricing strategies for digital information goods, such as those increasingly available via the Internet. Because perfect copies of such goods can be created and distributed almost costlessly, any single positive price for copies is likely to be socially inefficient. However, we show...

Once purchased, information goods are often shared within small social communities. Software and music, for example, can be easily shared among family or friends. In this paper, we ask whether such sharing will undermine seller profit. We reach several surprising conclusions. We find, for...