Abstract:

Online Material & Waste Exchanges (OMWEs) are internet-based B2B markets that

coordinate transactions of surplus materials, by-products and waste across industrial facilities.

Collectively, OMWEs possess the potential to repurpose millions of lbs. of industrial materials and

save billions of dollars in disposal fees and inventory costs. Unfortunately, OMWE’s also have

several challenges that have limited their efficiency. We analyse novel transaction-level data from

one such OMWE (MNExchange.org) combined with other archival public records on county-level

repurposing and disposal statistics to generate insights into the design and development of OMWEs.

In the first study, we investigate factors that reduce the buyers’ uncertainty and increase the

sellers’ commitment to the OMWE. First, we show that regional repurposing policies and alternatives have

a complementary effect on sellers’ commitment towards OMWEs, resulting in increased OMWE

exchanges. However, regional disposal policies and alternatives have a substitution effect on sellers’

commitment, resulting in reduced exchange success. Further, greater product and transaction

information reduces the buyer’s uncertainty and increases exchange success. Finally, higher

familiarity between the buyer-seller pair and familiarity with the OMWE system leads to higher

likelihood of exchange success. In the second study, we exploit a quasi-experiment in our empirical setting (MNExchange.Org)

to examine the effects of an operational policy change 　which eliminated human intermediaries.

We show that elimination of this form of intermediary had dire consequences on the

market efficiency as measured by (i) likelihood of successful transactions and (i) time to a successful

transaction. Although the overall effect was significant, we also find more nuanced effects for

certain types of items. Specifically, process-use (relative to end-use), negotiable (relative to free) and

one-time (relative to recurring) items faced significantly greater transactional challenges