Towards Electronic Marketplaces: A Progress Report

Market design is becoming a very important research topic in the context of the electronic economy. Two factors explain this trend: (1) the creation of new markets to facilitate deregulation (telecommunication frequencies, electric power, etc.) and (2) the emergence of strategic analysis and of experimental economics. E-commerce tools will contribute to the emergence of more structured marketplaces. Private service providers will begin offering price-discovery and demand-and-supply equilibrating mechanisms. Market design issues are therefore becoming important for private e-commerce service providers. The TEM (Towards Electronic Marketplaces) project investigates issues related to the design of virtual marketplaces, whether these marketplaces are centralised or decentralised. In this paper, we present the global objectives of the TEM project, along with its specific goals, and current results. In particular, we focus on the challenges for electronic markets and on the approaches used to meet these challenges.