Showing papers in "International Journal of Electronic Commerce in 2000"

Toward a Generic Model of Trust for Electronic Commerce

Abstract: The authors present a generic model of trust for electronic commerce consisting of two basic components, party trust and control trust, based on the concept that trust in a transaction with another party combines trust in the other party and trust in the control mechanisms that ensure the successful performance of the transaction. This generic trust model can be used in designing trust-related value-added services in e-commerce. To illustrate its design use, two e-commerce activities that require trust are compared: electronic payment and cross-border electronic trade. The model shows that each of these activities requires a different type of trust, created by completely different services.

Reintermediation strategies in business-to-business electronic commerce

Abstract: The literature on electronic commerce and electronic marketplaces has long recognized the importance of intermediaries and the functions they serve. The Internet is most often discussed in connection with digital intermediaries as the displacement of traditional intermediaries. This article proposes a new conceptual framework for understanding how competition in business-to-business (B2B) electronic commerce in the presence of information technology (IT) innovations changes firm-level strategy choices and the structure of the marketplace. It also identifies and discusses the economic forces that lead to these changes, and in this context describes a recurring pattern of intermediation, disintermediation, and reintermediation through an "IDR framework." The article explains the impetus for technological reintermediation, where a disenfranchised traditional player is able to compete again by leveraging technological innovations with cospecialized assets. This perspective is built with the support of relevant literature from several reference disciplines and with evidence from a field study of intermediation on the Internet in the corporate travel industry. The analysis reveals that traditional travel firms have access to a range of strategies that enable them to avoid disintermediation and retain highly profitable central roles in the marketplace in the long run.

Quantitative characterization and prediction of on-line purchasing behavior: a latent variable approach

Abstract: Realizing the full potential of the on-line consumer market requires careful identification of customer needs and expectations. As research on Internet consumer behavior is still in its infancy, a quantitative framework to characterize user profiles for e-commerce has not yet been established. This study proposes a quantitative framework that uses factor analysis to identify latent factor descriptors of Internet users' opinions on Web vendors and on-line shopping. Predictive models based on logistic discrimination and neural networks then select the factors most predictive of the propensity to buy on-line and classify Internet users accordingly. The application of this framework shows that the obtained latent factors agree in general with the major indicators identified in previous qualitative research. A small subset of the obtained factors is shown to retain the predictive power of the whole set. Neural networks are found to perform only marginally better than logistic discrimination in the task of classification.

An emerging vision of internet-enabled supply-chain electronic commerce

Abstract: Increasingly, large retail companies are finding that the traditional vision of Electronic Data Interchange, using a value-added network with expensive message-translation software and private wide-area networks, is unable to deliver its promise of paperless trading with their suppliers. Many companies have achieved a high level of EDI compliance from their large suppliers, but unsophisticated, usually small, suppliers generally remain outside their electronic commerce networks. This poses a serious problem, since the most important business reengineering benefits require 100 percent compliance. Many large retailers are turning to the diverse range of new Internet-based document distribution and presentation systems for ways of including unsophisticated traders in their replenishment systems.The traditional EDI vision resulted from the interaction of several aspects of the replenishment problem (available technology, transaction cost structure, the power of message-transmission intermediaries, notions about how to achieve supply-chain cooperation, shared understandings of correct e-commerce practice within the industry), but it achieved only partial supply-chain compliance because it failed to take account of the differences between sophisticated and unsophisticated trading partners. This paper argues that the commercial availability of the Internet does more than simply provide a cheaper alternative document-transmission channel. Rather, by upsetting the balance among the contextual forces, it allows the emergence of a new vision of supply-chain electronic commerce featuring a backbone any-to-any network of EDI-compliant, technologically sophisticated trading partners, with Internet-based subnetworks, centered on large players or third parties, using proprietary software, development tools, and message formatting to provide connection to unsophisticated players.

Information systems orientation and business use of the internet: an empirical study

Abstract: A research model based on the concept of a strategic grid was developed to examine the relationship between the role of information systems (IS) and organizational use of the Internet to achieve business competitiveness. A survey questionnaire was sent to 650 companies in Singapore, and 225 usable responses were obtained. The results indicated that firms with a more strategic view of IS make the most use of the Internet to achieve business competitiveness (in terms of the customer-to-business, intrabusiness, and business-to-business dimensions). In particular, achieving market responsiveness (construct within the customer-to-business dimension) was the most significant differentiating variable in the extent of Internet usage among organizations in which IS plays different roles. Although other performance measures are important in designing an Internet strategy, this suggests that market responsiveness should receive special emphasis, since the Internet's global nature enhances access to new markets.

Determinants of On-Line Channel Use for Purchasing Financial Products

Abstract: On-line shopping is expected to experience exponential growth in the coming decades, but few researchers have examined consumers' motivations for using on-line channels The current study investigates the determinants of consumer use of on-line channels to purchase financial products There are three key findings First, consumers who experience conflict with their financial agents are more likely to use the on-line channel This suggests that conflicting relationships can make the two channels competitive rather than complementary Second, consumer willingness is an important predictor of on-line information search Third, consumers who use the on-line channel for information search are more likely to use it for transactions The last two findings indicate that consumer adoption of the on-line channel is a stagewise process

Assessing the value of interorganizational systems to support business transactions

Abstract: In interorganizational settings, the use of information systems (IS) and networks is often not formally evaluated, and decisions are made by "gut feeling" rather than based on rational evidence Since benefits depend not only on internal contingencies but also on the decisions and loyalty of business partners, issues of trust and the risk of becoming locked in with a disloyal partner become crucial The Internet and Web-based technologies, by facilitating system development and the deployment of interorganizational systems (IOS), may help change this picture In times when IT use is becoming more and more important for firms to remain competitive and efficient, system costs and benefits have to be carefully balanced in order to build systems that are perceived as beneficial even in cases where risk aversion makes this difficult This paper examines applications that support interfirm business transactions, in particular those that involve buying processes A conceptual model for the evaluation of investments is introduced that takes into account the perspectives of the initiator and the prospective participants The model is applied to a system developed by the Lawrence Livermore National Laboratory (LLNL) to link it with suppliers and support purchasing processes

Business Networking Systems: Characteristics and Lessons Learned

Abstract: Designing relationships among business units is of growing competitive relevance. Business networking is largely enabled by the interorganizational information systems (IOS) that have evolved since the 1960s. However, many companies initially invested in enterprise resource planning systems (ERP) and have only recently begun to complement these systems with networking capabilities. The developmental path toward IOS is referred to here as business networking systems (BNS). The major challenges for such systems are described, along with the main types of systems and the criteria for characterizing them. Three case studies identify techniques and lessons learned in designing business networking systems. Methodologies for BNS projects should treat these lessons as integral elements that sustain adoption and business orientation.

Pricing and Product Design: Intermediary Strategies in an Electronic Market

Abstract: Electronic intermediaries play an important role in many Web-based electronic markets, adding value for participants by offering such services as matchmaking and trust. This paper presents an economic model of intermediation where the intermediary offers services to two types of actors: consumers and providers. When consumers are heterogeneous, differentiated by their willingness to pay for intermediation, the intermediary can potentially offer two (or more) levels of service quality to target different consumer segments. The analysis in this paper highlights the aggregation benefit that consumers derive from having access to multiple providers through the intermediary. According to prior research on vertically differentiated digital goods, it is optimal to offer only one quality level in the market, because segmentation causes cannibalization and lowers profits. In the case of intermediation, however, the aggregation benefit makes it optimal for the intermediary to offer both levels of service. The intermediary's profits increase when the quality of the lower-quality service is decreased, suggesting that the two quality levels should be differentiated as much as possible. If the aggregation effect is intense, the intermediary should make the service free for providers.

Behavioral Effects of Using Software Agents for Product and Merchant Brokering: An Experimental Study of Consumer Decision-Making

Abstract: Agent technology has been applied to design new services known as "shopbots" that simplify product and merchant brokering in several consumer industries. The use of shopbots is expected to reduce consumer search costs and make buying behavior more rational. Based upon a decision-making model, the author proposed 12 hypotheses pertaining to the effects of shopbot use on consumer buying behavior and tested them in an experiment in which consumers chose a financial-service provider. His hypotheses relating to changes in information-search behavior were strongly supported, but there was only partial support for the hypotheses on changes in choice behavior, and no evidence of differences at the problem-recognition and judgment stages of the buying process between consumers using shopbots and other consumers. Although this research was exploratory, the findings suggest that vendors of high-complexity products need not fear losing customers because of shopbot use. Since many customers perceive shopbots as value-added services that make information search on the Internet more satisfying, offering access to such services may help vendors to retain their customers.

The New York City Smart Card Trial in Perspective: A Research Note

Abstract: The adoption of smart cards continues to be more interesting to those who market them than to the target population. A high-profile test of Mondex and Visa Cash stored-value cards ended in 1998 after a 15-month run on Manhattan's Upper West Side. The results were disappointing. This paper describes the organization of the trial, analyzes the results, and offers possible explanations for the low consumer and merchant acceptance. These explanations are integrated with prior analyses into a coherent theoretical framework combining insights from the literature on network externalities and innovation diffusion.

Organizational Learning as a Foundation of Electronic Commerce in the Network Organization

Abstract: Models of organizational learning must be adapted to network enterprises, virtual enterprises, and other new organizational forms enabled by information technology. Since it is increasingly among these enterprises that e-commerce activity occurs, organizational learning is a requisite for reaping the benefits they offer and avoiding the pitfalls. A model was developed and validated based on a case study of 14 small and medium-sized manufacturing enterprises (SMEs) that belonged to a network of subcontracting firms for a large pivot-firm. In terms of network learning, the SMEs were classified either as advanced firms, intermediates, or beginners.

On Lean Messaging with Unfolding and Unwrapping for Electronic Commerce

Abstract: EDI (electronic data interchange) messages are notoriously lean and difficult (or impossible) to interpret without additional information. The authors acknowledge the many criticisms of the EDI protocols, but argue that there is something basically correct, even inevitable, in the leanness of EDI messages. They present a framework that describes how EDI messages are interpreted, and indeed must be interpreted. "Unwrapping" and "unfolding" of messages are the central elements. These concepts are discussed in detail, and the article demonstrates how to exploit them in formalizations for electronic commerce. In particular, it shows how Kimbrough's lean-event semantics for speech acts, and Tan and Thoen's theory of directed obligation can be fit naturally and fruitfully into this framework, and to each other. Much remains to be done, but the progress in formalization in evidence here should be generalizable.

KQML and FLBC: Contrasting Agent Communication Languages

Abstract: Communication languages for agents are designed to minimize message size and function more as data-passing protocols. Flexibility and transparency have not been emphasized. The author analyzes the formal semantics of KQML as an exemplar of agent communication languages. For each KQML performative he specifies an FLBC message with more or less equivalent effects. The purpose is to compare a standard agent-based language (KQML) with one that more directly represents the meaning of the message. The results indicate that the latter type of language makes message composition more powerful, message decomposition feasible, and defines many more useful messages without adding message types or increasing vocabulary size.

Mobile Agents in Electronic Markets: Opportunities, Risks, Agent Protection

Abstract: This article characterizes the tasks that mobile software agents can perform in electronic markets, the risks they entail, and the appropriate protective mechanisms. Market servers have to be protected against malicious agents, and mobile agents have to be protected against malicious hosts. The latter is quite difficult, because a host must be able to read an agent's code and data in order to execute them. Several approaches to protecting mobile agents are surveyed and evaluated, and the possible application fields for each are examined. One of the approaches is used to develop an electronic market architecture for mobile agents that provides market participants with security and anonymity.

A Formal Analysis of Auditing Principles for Electronic Trade Procedures

Abstract: One of the major issues involved in establishing new trading relationships is the lack of an a priori trust relationship between the parties. This is an old and well-known problem in international commerce. Unless it can be solved, establishing new trading relationships will be virtually impossible. One way to create the necessary trust is by using procedures that involve exchanges of documents between the trading partners to verify that each party has fulfilled its part of the agreement. The paper documents formerly used for this purpose are being replaced, in electronic commerce, by information exchanges. The issue of whether these are as trustworthy as paper documents remains a crucial question. It is easy to guarantee the uniqueness of ownership documents in the case of signed paper documents, but much harder with electronic messages. Electronic commerce will not succeed in international trade unless the trustworthiness of electronic versions of trade procedures can be demonstrated beyond reasonable doubt. This article presents a formal specification of a set of design principles for trustworthy trade procedures that adapts the basic principles of internal auditing within a company. This auditing method has already been implemented in INTERPROCS, a Prolog-based tool for representation and analysis of procedures. The formal specification of this auditing method can be used to verify audit principles, and in particular the INTERPROCS implementation of these principles. It is based on a combination of deontic, dynamic, and illocutionary modal logics.

Artificial Agents for Discovering Business Strategies for Network Industries

Abstract: This study explores the use of artificial agents to discover "good" pricing, investment, and operating strategies for network industries. It models the first-best pricing, investment, and operating problems for general network industries, applies this theoretical framework to the electric power industry, and uses artificial agents to obtain computational results on realistic problems. Artificial agents can discover optimal or near-optimal pricing, investment, and operating strategies when the optimal solution is known. For problems with unknown optimal solutions, they can match the "best-known solutions." The near-optimal solutions provided by artificial agents can sometimes only be tested by pushing the limits of currently available nonlinear optimization software. Artificial agents, if carefully designed and controlled, seem very promising for solving difficult problems that are intractable by traditional analytic methods, such as discovering business strategies for network industries.

Behavioral Effects of Using Software Agents for Product and Merchant Brokering

Abstract: Agent technology has been applied to design new services known as "shopbots" that simplify product and merchant brokering in several consumer industries. The use of shopbots is expected to reduce c...

A Multi-Agent System Performing One-to-Many Negotiation for Load Balancing of Electricity Use.

Abstract: Abstract Emerging technologies allowing two-way communication between utility companies and their customers are changing the rules of the energy market. Deregulation makes it even more demanding for utility companies to create new business processes for the mutual benefit of the companies and their customers. Dynamic load management of the power grid is essential to make better and more cost-effective use of electricity production capabilities, and to increase customer satisfaction. In this paper, methods from agent technology and knowledge technology have been used to analyse, design, and implement a component-based multi-agent system capable of negotiation for load management. The proof-of-concept prototype system NALM (negotiating agents for load management) developed shows how under certain assumptions peaks in power load can be reduced effectively based on a negotiation process.

Web-Based Periodicals as an Emerging Cultural Form: Incumbent and Newcomer Producers in the Early Stages of Industry Revolution

Abstract: This research is an investigation of Web-based periodicals, an emerging cultural form that presents magazine content in an electronic medium. Specifically, it compares incumbent producers of Web-based complements to paper publications with newcomer producers of independent Web-based documents. Drawing on evolutionary perspectives from organizational theory, hypotheses are developed predicting differences between incumbent and newcomer producers of an emerging cultural form. Hypothesis tests on a random sample of 114 Web-based periodicals, combined with a rigorous qualitative analysis, show that incumbent producers have more characteristics that suggest longevity than newcomers, such as symbolic ties to other organizations that add credibility, advertising solicitations that attract environmental support, and clear target audiences that confer market viability. Newcomer producers are technologically more sophisticated, but the new media applications that distinguish them are impractical for mainstream use.

Introduction to the special section: electronic intermediaries and networks in business-to-business electronic commerce

Abstract: Business-to-business (B2B) e-commerce has become a focal point of interest for practitioners, investors, and academics. One reason for this is the realization that many of the most financially promising e-commerce applications are to be found in the business-to-business environment. In this context, the role of channel intermediaries and value-added networks is an increasingly important area of focus. This special section of the International Journal of Electronic Commerce on B2B e-commerce intermediaries and networks evolved from papers that were initially presented in the \"Internet and Digital Economy Track\" of the Thirtysecond Arumal Hawaii International Conference on Systems Sciences (HICSS32), held in January 1999. Three articles were selected that related to this theme, and each of them was extensively revised and improved by its authors, based on comments by the reviewers and the editors of the special section, during a nine-month review process. The resulting articles are focused on the challenges and opportunities associated with new forms of channel intermediaries and networks that enable new business process and interorganizational relationships to evolve using Internet and value-added networks. They represent research perspectives that span the globe. Numerous readily observed organizational and structural changes in market activities in many industries have resulted from the technological innovations associated with e-commerce. Alina M. Chircu and Robert J. Kauffman, in the first article of this special section, present a new conceptual framework for understanding how information technology innovations can enable new channel intermediaries and new forms of commerce to develop within existing channels. Their intermediation-disintermediation-reintermediation (IDR) framework is a useful conceptual model for explaining complex changes in channel structure that add up to define a new market structure and industry organization. The framework also suggests a range of appropriate competitive strategies that can be applied with B2B e-commerce technologies and software applications. Using the travel industry as a basis for illustration, the authors analyze approaches that existing intermediaries can use to reduce the risks from disintermediation as they develop new strategies, enabled by the new technologies, to reintermediate their channel relationships and revamp existing business processes. Significant transformations are also occurring in supply-chain management (SCM), according to the authors of the second and third papers in this special section. The first of these two articles, by Robert Johnston and Horace Mak, examines the potential for new forms of Internet-enabled SCM systems to overcome barriers to the adoption of improved processes and technologies. As firms shift their channel transactions from high-cost proprietary networks to Internet platforms, the benefits of traditional Electronic Data Interchange (EDI) applications can be realized by a firm's entire network of trading partners. Integration

The New York City Smart Card Trial in Perspective

Abstract: The adoption of smart cards continues to be more interesting to those who market them than to the target population. A high-profile test of Mondex and Visa Cash stored-value cards ended in 1998 aft...

Business Networking Systems

Abstract: Designing relationships among business units is of growing competitive relevance. Business networking is largely enabled by the interorganizational information systems (IOS) that have evolved since...

Toward a Generic Model of Trust for Electronic Commerce

Abstract: The authors present a generic model of trust for electronic commerce consisting of two basic components, party trust and control trust, based on the concept that trust in a transaction with another...