Horizontal versus Vertical Electronic Business-to-Business Marketplaces

Henseler, Marco (2006): Horizontal versus Vertical Electronic Business-to-Business Marketplaces. Published in: Discussion paper series from the Institute of Economics and Law, University of Stuttgart No. 2006/1

Abstract

This paper analyzes the behavior of horizontal B2B marketplaces along the supply chain in case a vertical intermediary tries to enter by attracting industry-specific buy-side and sell-side firms. It will be shown that an entrant can only integrate all firms along the vertical production chain in case the industry is strong buy-side dominated. For the remaining scenarios we will determine different levels of integration for buy-side and sell-side dominated branches, in which firms from upper stages will stay at the incumbent. Moreover, we will show that horizontal marketplaces for MRO and other simple goods will be driven out of the market in any case.

• Item Type: MPRA Paper
• Language: English
• Keywords: intermediation, matching, two-sided markets
• Subjects: C - Mathematical and Quantitative Methods > C7 - Game Theory and Bargaining Theory > C78 - Bargaining Theory ; Matching Theory; L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance > L13 - Oligopoly and Other Imperfect Markets; L - Industrial Organization > L2 - Firm Objectives, Organization, and Behavior > L22 - Firm Organization and Market Structure; L - Industrial Organization > L8 - Industry Studies: Services > L86 - Information and Internet Services ; Computer Software

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