The Effect of Information on Market Activity: Evidence from Vehicle Recalls

• 成果类型: Article
• 署名作者: van den Bijgaart, Inge; Cerruti, Davide
• 署名单位: University of Gothenburg; Swiss Federal Institutes of Technology Domain; ETH Zurich
• 刊物名称: REVIEW OF ECONOMICS AND STATISTICS
• ISSN/ISSBN: 0034-6535
• DOI: 10.1162/rest_a_01164
• 发表日期: 2024-01
• 页码: 230-245
• 关键词: Adverse selection; product recalls; QUALITY; reputation; disclosure; price; cash

摘要

We evaluate the effect of vehicle recalls on vehicle transactions in the second-hand market. Using a rich data set of Dutch vehicle registrations, we exploit the quasiexperimental variation in recalls across nearly identical cars. We find strong heterogeneities across market segments: transactions increased for cars with lower listed price or with defects, and decreased for those with higher price or no defects. Based on our theoretical model, this suggests that recalls increase sorting in low-end markets, yet exacerbate adverse selection in high-end markets. Our results shed light on the effect of information arrival in markets subject to uncertainty and information asymmetries.