As the construction and application of electronic markets began with the emerging Internet, the prevailing paradigm for network communication was client-server. To find a coherent implementation, market designers at that time fell back on this most self-evident network topology. The design of electronic marketplaces is still influenced by proven traditional implementations. Stock exchanges, for example, that were among the driving forces for electronic markets are one such archetype. They classically fulfill the role of an intermediary by reducing the number of communication links between participants and providing a common contact point for aggregated market information. So, by acting as client-server systems they reduce transaction costs significantly.
And still, at their very core, some non-electronic stock exchanges show — and always have shown — the Peer-to-Peer paradigm, as on the physical trading floor traders (peers) interact directly when exchanging stocks. They exhibit this trade paradigm that, in the course of the development of centralized market software systems, has been losing ground.
With the liberalization of markets, the formerly ‘dependent’ market participants are now regaining autonomy in their market decisions. Harmonization of markets unifies different groups of participants and thereby increases the number of those that can interact with each other. This constitutes the main theme of this chapter: when a market per se is a Peer-to-Peer system and participants regain autonomy, how can we design an appropriate architecture for electronic markets that comprehensively implements the Peer-to-Peer paradigm? While investigating this question, we particularly focus on the support of spontaneity and interoperability by means of self-organization in liberalized and harmonized markets.
To systematically analyze Peer-to-Peer systems, the Peer-to-Peer paradigm can be seen at three different levels, according to : community, application, and infrastructure. As mentioned above, a market can be regarded as a Peer-to-Peer community at the top level. The remaining challenge is whether, and if so, how the application and infrastructure levels can be developed in compliance with the Peer-to-Peer paradigm. After presenting our approach, we also discuss its benefits and drawbacks.