Electronic markets may soon affect the evolution of the national information infrastructure (NII), or in formation superhighway, as well as the emerging global infrastructure. As the NII is connected to consumers’ homes, market activity will rapidly expand. When this happens (most likely over a ten-year period), significant changes in the economics of marketing channels, patterns of physical distribution, and the structure of distributors may also occur. In this article, we draw on previous research on transaction costs and electronic markets to suggest that: (1) all intermediaries between the manufacturer and the consumer may be threatened as the NII reaches out to the consumer; (2) profit margins may be substantially lowered and redistributed; (3) the consumer will have access to a broad selection of lower-priced goods; and (4) there will be many opportunities to restrict consumers’ access to the potentially vast amount of commerce.
Central to the evolution will be the way in which the “market choice box,” the consumer’s interface between the many electronic devices in the home (television, telephone, and computers), the information superhighway, and the vast variety of market choices, will be implemented. Although many of these potential areas of restricted access are being debated in public policy arenas, the market choice box, a technology component, may become a critical component of free access and thus needs policy-makers’ scrutiny.
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