Market efficiency and transaction costs: theory and case studies of the Electronic Purchase System of the State of São Paulo and the Purchase Office of the Institute of Technological Research

Abstract

Many studies point out the advantages of the e-commerce, presenting its growing importance in the firms' performance. Purchase electronic systems provide efficiency increase and add value to the interaction between sellers and buyers. The improvement of methodologies in the implementation of these systems results in increased market efficiency, contributing to eliminate economic imperfections. The present article is meant to discuss the relevant literature on the subject and the economic fundamentals of the introduction and operation of purchasing systems based on internet and intranet. This is done by means of appropriating the basic market functions and an analysis and classification of the transaction costs, concept derived from the contribution of the New Institutional Economics. Transaction costs represent a new dimension of the traditional neoclassic production cost analysis. A theoretical model is formalized to identify the relevant variables in this research program, including how information technology can better allocate resources, in the short and long run. Empirical evidence is taken from two organizations: Bolsa Eletrônica de Compras do Estado de São Paulo (Electronic Purchase System of the Government of the State of São Paulo, Brazil - BEC/SP) and Central de Suprimentos do Instituto de Pesquisas Tecnológicas (Purchase Office of the Instituto de Pesquisas Tecnológicas - CS/IPT).