The Network Economy Exchange Functionality Changes

Exchanges have been playing an important role in the market transactions from the time when they came into effect. They have helped not only to match the supply and demand but also minimizing the transaction risks. At the entry into a network economy age, there emerged kinds of new organizations working with versatile methods on market information processing which used to be carried out by exchanges only. And brand new theories and principles rose in the economics of networks as well. The original base generated the birth of exchanges are wholly different in the new age. They have to share advantages they held exclusively before with other market players. This paper focuses on the adjustment of market functions of exchanges, especially Shanghai Shipping Exchange, how can they survive and develop in the network economy age?Based on an deep understanding of Shanghai Shipping Exchange and a general study of how network economy influences the operation of exchanges, the author considers that, as a result of network economy, information would become one of the most important elements of development and due to the sequential existence of cost of transaction and searching cost in the new age, the exchanges would continue their growth in the arena. The new techniques would help to improve the quality of transaction and conduce development of new functions. But in turn, exchanges would inevitably be confronted with competition from a broader range and compete in a more severe way.To the Shanghai Shipping Exchange, the author argued that, it should adjust its existing functions as soon as possible, both excluding the outdated ones and creating new value-added services. She also suggested Shanghai Shipping Exchange to turn into an institute of information releasing, industry researching and professional consulting, and form a reputation of authority, equitableness and justice in the shipping market, thus to promote the growth of Shanghai as an international shipping center.