Commercial arrangement for transactions

Markets can also be considered from another perspective - that of the type of commercial arrangement that is used to agree a sale and price between the buyer and supplier. The main alternative commercial arrangements are shown in Table 2.3.

It can be seen from Table 2.3 that each of these commercial arrangements is similar to a traditional arrangement. Although the mechanism cannot be considered to have changed, the relative importance of these different options has changed with the Internet. Owing to the ability to rapidly publish new offers and prices, auction has become an important means of selling on the Internet. A turnover of billions of dollars has been achieved by eBay from consumers offering items ranging from cars to antiques. Many airlines have successfully trialled auctions to sell seats remaining on an aircraft just before a flight.

Table 2.3 Commercial mechanisms and online transactions

Commercial (trading) mechanism

Online transaction mechanism of Nunes et al. (2000)

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