Introduction

As the Internet is spreading in our everyday life and business practices, it becomes clear that some of the major innovations that digital communication technologies have brought concern the process of intermediation. It is at that level of the production chain that the most radical changes affecting the organization of the exchange process will occur (see, for instance, The Economist (2000)). Traditional brick and mortar intermediation integrates several complementary functions. On one hand, it generates, processes and transmits various information flows that are necessary for transactions: this includes information about the existence, the characteristics and the location of the products or the terms of trade (the prices). On the other hand, it provides physical facilities that are used in the exchange process (transport, storage, exhibition, etc.). Digital technologies allow for an unprecedented separation between these two types of functions, due to the drastic reduction in the cost of information processing. One can then foresee a major impact on the distribution channels and on the vertical organization of industries. While it is hard to assess at what speed this will happen, it is clear that e-commerce and electronic intermediation will play a major role in the future. It then becomes imperative to understand how a sector specialized in information management (info-mediation) can organize itself when it incurs almost no variable costs, and how competition will operate in such a sector.