Design and Implementation of Electronic Communities

Abstract

Electronic communities can be designed to organize consumers, to pool their purchasing power, and to guide their purchasing decisions. Such commercial electronic communities have the potential to facilitate the creation of novel marketplaces, and even radically change the buyer–seller interaction, as physical communities did throughout the history. Commercial electronic communities are groups of consumers that participate in the marketplace as a single unit. In addition to bargaining power gained from such bundling, such communities can expand markets by reducing market uncertainty, and they have the potential to drastically reduce transaction costs. However, these benefits are not automatic, and the optimum design and implementation of communities are critical to their economic success. The size and the makeup of a community, the size and the nature of the product bundle it offers, and the concise description and efficient implementation of the community as an electronic marketplace are all critical factors for the success of a community.