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Trading across Borders in Online Auctions

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  • Elena Krasnokutskaya

    (Johns Hopkins University)

Abstract

We invoke the insights from the auction literature to study international trade in services using data from an online market for programming support. We find that the observed clustering of trade between countries can be rationalized through a model featuring endogenous sorting of sellers heterogeneous in quality and costs across projects offered by buyers who differ in willingness to pay for quality and outside options. We extend a single auction entry model to a setting where sellers choose among multiple projects available for bid. This plays an important role in explaining the data and understanding the effects of various trade policies.

Suggested Citation

  • Elena Krasnokutskaya, 2016. "Trading across Borders in Online Auctions," 2016 Meeting Papers 1537, Society for Economic Dynamics.
    • Handle: RePEc:red:sed016:1537
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    References listed on IDEAS

    as
    1. Emmanuel Guerre & Isabelle Perrigne & Quang Vuong, 2000. "Optimal Nonparametric Estimation of First-Price Auctions," Econometrica, Econometric Society, vol. 68(3), pages 525-574, May.
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    Cited by:

    1. Matthew Backus & Gregory Lewis, 2016. "Dynamic Demand Estimation in Auction Markets," NBER Working Papers 22375, National Bureau of Economic Research, Inc.

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    More about this item

    JEL classification:

    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality
    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software

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