Reputation and adverse selection: theory and evidence from eBay

• 成果类型: Article
• 署名作者: Saeedi, Maryam
• 署名单位: Carnegie Mellon University
• 刊物名称: RAND JOURNAL OF ECONOMICS
• ISSN/ISSBN: 0741-6261
• DOI: 10.1111/1756-2171.12297
• 发表日期: 2019
• 页码: 822-853
• 关键词: perfect industry dynamics; asymmetric information; auctions; models

摘要

How can a marketplace introduce mechanisms to overcome inefficiencies caused by adverse selection? In this article, I use a unique data set that follows eBay sellers to show that reputation is a major determinant of price variations. I develop a model of sellers' dynamic behavior where sellers have heterogeneous qualities unobservable by buyers. Using reputation as a signal of quality, I structurally estimate the model to uncover buyers' utility and sellers' costs and underlying qualities. I show that removing the reputation mechanism increases low-quality sellers' market share, lowers prices, and consequently reduces sellers' profit by 66% and consumer surplus by 35%.