Special Section: Improving New Digital Market Mechanisms

Effective market mechanisms are important for supporting the high performance and profitability of digital commerce firms, just as they have been for traditional buyer-seller exchange networks that maximize overall welfare and optimize the distribution of goods and services so firms can sustain viable businesses [5, 12]. Economic decisions typically are made based on the agents’ informedness about relevant opportunities for exchange, while recognizing the critical importance of incentive-compatibility and individual-rationality constraints that they face [7]. The latter depend on their preferences as well as on their resource endowments. Thus, market mechanisms, through the agents’ informedness and market-wide awareness they engender, offer a means for price discovery, link formation, transactional contracts, and the eventual (re-)allocation of products and services among market participants [8]. Intermediaries, through their self-interest paired with informational inefficiencies, may well reduce market efficiency on one side [11], while at the same time contributing market innovation and a co-creation of value (jointly with agents and firms) in their respective business circles and social networks [4, 9]. New technologies have emerged in the past decade to create social media-based communication, digital exchanges for shared goods and services, tracing capabilities for supply-chain goods and resources, wearable Internet-of-things devices, and—most recently—new ways to work due to the COVID-19 pandemic. One of the main impacts of information systems (IS) over the years has been to shift the boundaries of firms and support new ways for them to jointly create value within business networks and markets. Technology has exerted power to drive an information-based transformation of organizational strategy and society, yielding new organizational forms. It has also changed the ways in which people interact and dramatically transformed the (endogenous) nature of market linkages [2]. In addition, information asymmetries are no longer so asymmetrical, with the increasing availability of customer-centric data. Second-degree price discrimination (based on self-selection in a world of unobservable characteristics) is moving toward third-degree price discrimination (derived from detailed, consumer-specific information) through personalized “special offers,” mass customization, and personalization, creating “markets-of-one” [10]. This Special Section of Journal of Management Information Systems (JMIS) on Improving New Digital Market Mechanisms deals with theoretical and practical issues that arise with market mechanisms for social media-based customer services in the airline industry and rewards-based crowdfunding in the fintech sector. In these applied contexts, there are economic incentives that prompt air carriers to seek new channels for harvesting passenger complaints about their services. Similar types of incentives encourage crowdfunding