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Is There an eBay for Ideas? Insights from Online Knowledge Marketplaces

Gary Dushnitsky

London Business School; University of Pennsylvania - Management Department

Thomas Klueter

University of Navarra - Entrepreneurship

October 26, 2010

The market for knowledge grew dramatically over the past decades. Extant work underscores the factors shaping market efficacy: (a) the cost of searching for innovative knowledge, (b) asymmetric-information between inventors and investors, and (c) the inherent difficulty in maintaining ownership over knowledge. Recently, market transactions have been taking place online, matching disperse owners (entrepreneurs or inventors) and seekers (investors or licensees) of knowledge. This phenomenon constitutes a sharp departure from past practices where transactions tend to materialize around one’s social circle (e.g., venture capitalists’ social ties). We investigate the drivers of market efficacy in a setting where social ties are not available ex-ante, and identify alternative market mechanisms that emerge in such settings. Using a novel hand-collected data for 30 online knowledge marketplaces, we find overwhelming evidence of adverse-selection-mitigating mechanisms (e.g., screening through upfront fees and disclosure requirements). We discuss theoretical explanations that are consistent with the observed mechanisms.

Number of Pages in PDF File: 40

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Date posted: November 2, 2010 ; Last revised: October 26, 2014

Suggested Citation

Dushnitsky, Gary and Klueter, Thomas, Is There an eBay for Ideas? Insights from Online Knowledge Marketplaces (October 26, 2010). Available at SSRN: http://ssrn.com/abstract=1701229 or http://dx.doi.org/10.2139/ssrn.1701229

Contact Information

Gary Dushnitsky (Contact Author)
London Business School ( email )
Sussex Place
Regent's Park
London, London NW1 4SA
United Kingdom
HOME PAGE: http://faculty.london.edu/gdushnitsky/index.html
University of Pennsylvania - Management Department ( email )
The Wharton School
Philadelphia, PA 19104-6370
United States
Thomas Klueter
University of Navarra - Entrepreneurship ( email )
United States
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