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