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Tractors on eBay: Differences between Internet and In-Person Auctions

Author

Listed:
  • Diekmann, Florian
  • Roe, Brian E.
  • Batte, Marvin T.

Abstract

Internet auction platforms are changing the face of transactions in many business sectors, including agriculture. We provide one of the first systematic examinations of the differences between internet and in-person auctions in agricultural input markets. A hedonic model estimated with used tractor transactions from Midwestern sellers pooled between eBay and in-person auctions reveals statistically distinct price surfaces for the two auction venues and predicts significantly lower prices for comparable equipment sold on eBay, though this difference is attenuated for tractors fully covered by eBay's buyer protection program and is fully absent for the most frequently traded tractor. An endogenous venue-selection model reveals that larger, more-valuable tractors are less likely to be offered on eBay, a choice that should enhance seller revenues. Furthermore, sellers in states with more valuable stocks of machinery, more frequent tractor sales, and a lower propensity to use the internet for agricultural marketing are more likely to offer tractors for sale via in-person auctions than on eBay.

Suggested Citation

  • Diekmann, Florian & Roe, Brian E. & Batte, Marvin T., 2007. "Tractors on eBay: Differences between Internet and In-Person Auctions," 2007 Annual Meeting, July 29-August 1, 2007, Portland, Oregon 9694, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    • Handle: RePEc:ags:aaea07:9694
    DOI: 10.22004/ag.econ.9694
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    Cited by:

    1. Feuz, Ryan, 2023. "Hedonic Price Analysis of Used Tractors," Applied Economics Teaching Resources (AETR), Agricultural and Applied Economics Association, vol. 5(1), January.
    2. Daninger, Nathan & Gunderson, Michael A., 2017. "The Pricing and Depreciation Patterns of Used Tractors," 2017 Annual Meeting, July 30-August 1, Chicago, Illinois 258282, Agricultural and Applied Economics Association.
    3. Milovanović, Slavoljub, 2014. "The Role And Potential Of Information Technology In Agricultural Improvement," Economics of Agriculture, Institute of Agricultural Economics, vol. 61(2), pages 1-15, June.
    4. Kevin Hasker & Robin Sickles, 2010. "eBay in the Economic Literature: Analysis of an Auction Marketplace," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 37(1), pages 3-42, August.
    5. Eric Overby & Chris Forman, 2011. "The Effect of Electronic Commerce on Geographic Trade and Price Variance in a Business-to-Business Market," Working Papers 11-30, NET Institute.

    More about this item

    Keywords

    Marketing;

    JEL classification:

    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness

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