The Impact of IT on Market Information and Transparency: A Unified Theoretical Framework

Abstract

With the advent of the Internet, we have seen existing markets transform and new ones emerge. In this paper, we contribute to the understanding of this phenomenon by developing a unified theory about the role that IT plays in affecting market information, transparency and market structure. In particular, we introduce a new theoretical framework which uncovers the process and the forces that, together with IT, facilitate or inhibit the emerging dominance of transparent electronic markets. Transparent electronic markets offer unbiased, complete, and accurate market information. Our effort to develop a unified theoretical framework begins with a thorough assessment of the prior literature. It also uses an inductive approach involving the case study method, in which we contrast and compare the forces that have led the air travel and financial securities markets to become increasingly transparent. Building on the electronic markets and electronic hierarchies research of Malone, Yates and Benjamin [1987], our findings suggest that IT alone does not explain a move to transparent electronic markets. Instead, we argue that enhanced electronic representation of products, and competitive and institutional forces have also played an important role in the process by which most sellers have come to favor transparent markets.

The Emerging Role of Vertical Search Engines in Travel Distribution: A Newly-Vulnerable Electronic Markets Perspective

“…In other words, e-commerce technologies increase the level of accuracy and completeness, and diminish the bias of price and product information. This increases market transparency [18].…”

Housing Price Differences Under the Development of New Towns: Using Taiwan as an Example

“…In other words, history transaction prices (the actual selling prices provided on the Real Estate Actual Selling Prices Inquiry Service Network) serve as effective anchors. Granados et al (2006) states that a transparent market is intended to provide unbiased, complete, and accurate market information. Transparency is defined as the accessibility to information of market prices, supply and demand, and other commodities being traded (Law and Smullen, 2008).…”

A Framework for Security Transparency in Cloud Computing

“…It is often considered as a universal remedy for all sorts of socioeconomic, sociocultural, socio-political and civic problems. Institutions gain the confidence of the public by ensuring that the demand and supply of information continue to flow and also by promoting mechanisms that assure the accessibility of information by the public [15]. Several denominators across different domains have offered various definitions and interpretations of transparency.…”