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ICT and Household-Firm Relations

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Author Info

  • Lindbeck, Assar

    ()
    (Institute for International Economic Studies, Stockholm University)

  • Wikström, Solveig

    ()
    (School of Business, Stockholm University)

Abstract

This paper discusses how ICT and emerging electronic commerce in consumer products influence the relative efficiency in production of households and firms, resulting in changes in the division of tasks between these two types of agents. Increased information and competence of households, in combination with stiffer competition among firms, will also increase the power of households relative to firms, at least in a long-term perspective with free entry of firms. Households will also get more powerful channels to influence firms directly, i.e., beside the indirect influence via market trans-actions. We point out that this will result in various counter-reactions by firms, includ-ing increased differentiation of products and prices. Finally, we briefly consider various limitations and obstacles to electronic commerce in a long-term perspective.

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Bibliographic Info

Paper provided by Stockholm University, Institute for International Economic Studies in its series Seminar Papers with number 677.

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Length: 29 pages
Date of creation: 01 Oct 1999
Date of revision:
Handle: RePEc:hhs:iiessp:0677

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Postal: Institute for International Economic Studies, Stockholm University, S-106 91 Stockholm, Sweden
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Keywords: information technology; household production; division of labour; market powers; competition;

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  1. Akerlof, George A, 1970. "The Market for 'Lemons': Quality Uncertainty and the Market Mechanism," The Quarterly Journal of Economics, MIT Press, vol. 84(3), pages 488-500, August.
  2. Darby, Michael R & Karni, Edi, 1973. "Free Competition and the Optimal Amount of Fraud," Journal of Law and Economics, University of Chicago Press, vol. 16(1), pages 67-88, April.
  3. J. Yannis Bakos, 1997. "Reducing Buyer Search Costs: Implications for Electronic Marketplaces," Management Science, INFORMS, vol. 43(12), pages 1676-1692, December.
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