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ICT and Household-Firm Relations

Author

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  • Lindbeck, Assar

    (The Research Institute of Industrial Economics)

  • Wikström, Solveig

    (School of Business)

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 transactions. We point out that this will result in various counter-reactions by firms, including increased differentiation of products and prices. Finally, we briefly consider various limitations and obstacles to electronic commerce in a long-term perspective.

Suggested Citation

  • Lindbeck, Assar & Wikström, Solveig, 1999. "ICT and Household-Firm Relations," Working Paper Series 527, Research Institute of Industrial Economics.
    • Handle: RePEc:hhs:iuiwop:0527
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    References listed on IDEAS

    as
    1. Lindbeck, A. & Wilkstrom, S., 1999. "ICT and Household-Firm Relations," Papers 677, Stockholm - International Economic Studies.
    2. George A. Akerlof, 1970. "The Market for "Lemons": Quality Uncertainty and the Market Mechanism," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 84(3), pages 488-500.
    3. 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.
    4. 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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    1. Lindbeck, Assar & Wikström, Solveig, 1999. "ICT and Household-Firm Relations," Working Paper Series 527, Research Institute of Industrial Economics.

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    More about this item

    Keywords

    Information Technology; Household Production; Division of Labor; Market Powers; Competition;
    All these keywords.

    JEL classification:

    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
    • D40 - Microeconomics - - Market Structure, Pricing, and Design - - - General
    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General

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