Alternative And Complementary Of Online Invisible Market And Traditional Professional Market

Since China's reform and opening up, the professional market has enjoyed rapid development in our country, because it can save enterprises'transaction cost adapting to the scale of SMEs. For Zhejiang Province has numbers of small and medium enterprises, it leads in both the number and size of the professional market. With the rapid development of information technology within nearly 10 years, online invisible trading method (mainly referring to e-commerce) has gradually infiltrated all aspects of market transactions. Based on this realistic background, this paper focuses on analyzing alternative and complementary of the two kinds of markets, that the two markets substitute or integrate with each other.According to microeconomic theory, the efficient market will be formed in the process of trader's pursuit maximization profits. This paper studies the relationship between Intangible online market and tangible professional market deeply, on the path that function differences of both marketsâ†'maximization profits differences of rational tradersâ†'differences of market trading systems. For both markets, although they are both shared trading platforms and have the same function that can save transaction costs and improve the trading efficiency, but the difference of virtual or physical nature decides their functional differences in both macro and micro. And microscopic features decide the choices of the traders.In the specific analysis for rational traders, a model of trader channel choice is constructed. Conclusions of model are got that:if the two markets develop in parallel way, which both markets fight for customers, it will form two differentiations. But in the long term, the trend of online market diminishing sales efforts will lead to co-operation needs of online market and special market. For rational traders, coordinated and complementary trading method will result in more profits than uncoordinated method. For endogenous transaction costs, the principle of optimal allocating resources determines that the online market can not reduce endogenous transaction costs largely in the short term, so, net profit can't be improved significantly. Therefore, whether in the short or long term, the online market can not completely replace the professional market. At best, it can only replace some functions of professional market. The paper also compared and analyzed several "market case", and found, in reality, the professional market and the online market are evolved in the means of "you have me, I have you", which validate the correctness of the model to some extent.