Introduction to the Special Issue: Electronic Markets

Jae Kyu Lee, Guest Editor
International Journal of Electronic Commerce,
Volume 4, Number 2, Winter 1999-2000, pp. 3.

This special issue is a collection of the best papers presented at the International Conference on Electronic Commerce held in February 1998 in Seoul, Korea. Taken together, the collection presents various aspects of creating electronic marketplaces, ranging from electronic malls for distance learning and for bundle shopping to price behavior and tax collection in electronic markets. It took a long while for the selected contributions to be made over as high-quality journal papers. We appreciate the authors’ laborious efforts to satisfy the reviewers’ suggestions after two separate readings, and also appreciate the reviewers’ valuable time.

The first paper, “The Electronic Education Mall: A Virtual Service Center for Distance Learning” by Christian Langenbach and Freimut Bodendorf, applies the concept of electronic malls to the education sector. The paper identifies the participants in the sector, as well as the various customer-initiated and supplier-initiated services, along with the steps necessary to deliver them. The idea is illustrated in the setting of a university as virtual lecture hall, virtual laboratory/seminar, lecture on demand, teletutor, and multimedia teachware packages. This framework can be used both by virtual universities and by the operators of commercial electronic education malls.

The second paper, “Critical Failure Factors That Discourage the Growth of Electronic Commerce” by Kyeong Seok Han and Mee Hyun Noh, analyzes the factors that discourage the growth of electronic commerce, and suggests possible strategies to overcome these obstacles. The paper reports on a survey conducted to evaluate their impact empirically. Six factors that affect E-commerce performance (such as satisfaction, usage, and expectation of usefulness) are studied by regression analysis. The results show that customers are not satisfied with unstable systems, lower levels of personal data security, inconvenient systems, and disappointing purchases.

The third paper, “The Impact of Electronic Marketplaces on Product Prices: An Empirical Study of AUCNET” by Ho Geun Lee, J. Christopher Westland, and Sewon Hong, studies whether, as often alleged, electronic marketplaces are a source of cheap purchases. In general, if customers have advance knowledge of product specifications and quality, E-commerce platforms help them find lower prices. However, for markets in which there is an intense need for quality guarantees, the major customer concern is not price, but quality assurance. This hypothesis is confirmed by experience in the electronic used-car marketplace-particularly AUCNET, the Japanese used-car market on the Internet.

The fourth paper, “Cyber-Consumption Taxes and Electronic Collection Systems: A Canonical Consumer-Delivered Sales Tax” by Jae Kyu Lee and Yeoul Hwangbo, analyzes the principles of consumption tax systems (sales taxes and value-added taxes) as alternatives in a cyber-consumption tax system. This study proposes a sales tax system in which taxes would be remitted by customers (rather than merchants) via electronic payment systems. Delivery processes by three typical electronic payment systems (credit cards, electronic fund transfers, and stored money value on smart cards) are designed for real- world implementation. The new system, named the Canonical Consumer-Delivered Sales Tax, can be used for cyber-consumption tax collection in harmony with traditional tax systems in physical space.

The fifth paper, “I-SEE: An Intelligent Searching Agent for Electronic Commerce” by In-geol Chun, Jin-goo Lee, and Eun-Seok Lee, investigates how to filter out irrelevant marketplace offerings and find relevant ones. The study presents an intelligent query-processing algorithm that consists of a query formulation tree and a genetic algorithm. The genetic algorithm models the evolution of the customer’s preferences. The performance of the algorithm is validated by experiments.

The sixth paper, “EASY Shopping: A Value-Added Service for Electronic Malls” by Petra Schumann, presents the design of an aid for individualized bundle shopping. This shopping mode will be particularly desirable in business purchasing. To this end, the ability to abstract from isolated product groups and to automatically compile individualized object systems in the form of bundles of goods and services is developed. This capability is embedded in an electronic mall to enhance service to customers.

Many challenging technical, managerial, and public policy issues arise in the development of effective electronic markets. The industry is moving very fast, and brilliant business ideas are surfacing. Scholarly work that aims to discover general theory and design principles takes a long time, but this effort will be the foundation for the next generation of education and research. This special issue is another stepping stone toward the same end.

JAE KYU LEE ( is a professor of management information systems at the Korea Advanced Institute of Science and Technology and a director of the International Center for Electronic Commerce. Earlier, he was an exchange professor at Carnegie Mellon University (1989) and the University of Texas at Austin (1994). Dr. Lee received his B.A. from Seoul National University, his M.S. from the Korea Advanced Institute of Science and Technology, and his Ph.D. from the Wharton School, University of Pennsylvania. In 1998 and 1996, respectively, he chaired the International Conference on Electronic Commerce (ICEC) and the Third World Congress on Expert Systems. He has authored several books on electronic commerce and expert systems, and has published papers in Management Science, Decision Support Systems, Expert Systems with Applications, Expert Systems, Decision Sciences, and other journals. Currently, he is a member of the editorial boards of International Journal of Electronic Commerce, Organizational Computing and Electronic Commerce, Electronic Markets, Decision Support Systems, Expert Systems with Applications, and several other international journals.