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Multidimensional quality sorting between online and offline auctions: The role of attribute transparency

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  • Olimov, Jafar M.
  • Roe, Brian E.

Abstract

We analyze how sellers of used construction equipment sort products between online and offline auctions based on the quality and transparency of different machine attributes. Sellers are more likely to offer machines online if quality is high for attributes whose integrity can be measured via photo (e.g., appearance) and more likely to offer machines offline if quality is high for attributes whose integrity is more reliably evaluated in person (e.g., engine). Quality averaged across all attributes is unrelated to auction choice, meaning standard tests of adverse selection can mask the subtle but significant effects of asymmetric information in this market.

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  • Olimov, Jafar M. & Roe, Brian E., 2017. "Multidimensional quality sorting between online and offline auctions: The role of attribute transparency," International Journal of Industrial Organization, Elsevier, vol. 53(C), pages 145-169.
    • Handle: RePEc:eee:indorg:v:53:y:2017:i:c:p:145-169
    DOI: 10.1016/j.ijindorg.2017.05.003
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    Cited by:

    1. Glenn Ellison & Sara Fisher Ellison, 2017. "Search and Obfuscation in a Technologically Changing Retail Environment: Some Thoughts on Implications and Policy," NBER Chapters, in: Innovation Policy and the Economy, Volume 18, pages 1-25, National Bureau of Economic Research, Inc.

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    More about this item

    Keywords

    Platforms; eBay; Sorting; Auctions;
    All these keywords.

    JEL classification:

    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions

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