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Selling mechanisms for perishable goods: An empirical analysis of an online resale market for event tickets

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  • Caio Waisman

    (Northwestern University)

Abstract

This paper assesses the value of the availability of menus of different selling mechanisms to agents in an online platform in the context of scarce perishable goods. By analyzing the choice between auctions and posted prices in the context of National Football League tickets offered on eBay, it estimates a structural model in which heterogeneous, forward-looking sellers optimally choose which selling mechanism to use and its features. Counterfactual results suggest that sellers would experience an average 87.37% decrease in expected revenues if auctions were removed and just a 4.34% decrease if posted prices were. In turn, buyers would benefit from an auction-only platform since the expected number of transactions would increase and expected transaction prices would decrease. These results suggest that while sellers benefit from menus of different selling mechanisms, the same does not hold for buyers. Thus, the implications for a platform, which should take into account both sides of the market, are ambiguous.

Suggested Citation

  • Caio Waisman, 2021. "Selling mechanisms for perishable goods: An empirical analysis of an online resale market for event tickets," Quantitative Marketing and Economics (QME), Springer, vol. 19(2), pages 127-178, June.
    • Handle: RePEc:kap:qmktec:v:19:y:2021:i:2:d:10.1007_s11129-021-09236-z
    DOI: 10.1007/s11129-021-09236-z
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    More about this item

    Keywords

    Mechanism choice; Auctions; Posted prices; Perishable goods; Platform design;
    All these keywords.

    JEL classification:

    • C57 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Econometrics of Games and Auctions
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce
    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism
    • M31 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Marketing

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