Role of Resource Gap and Value Appropriation: Effect of Reputation Gap on Price Premium in Online Auctions

Posted: 30 Jan 2008 Last revised: 14 Mar 2013

See all articles by Tomasz Obloj

Tomasz Obloj

HEC Paris - Strategy & Business Policy

Laurence Capron

INSEAD - Strategy

Date Written: April 15, 2010

Abstract

In this study we draw on the resource-based view of the firm and on value-added methodology to examine when firms appropriate value from their superior resources. We argue for the need to take into account the role of the resource gap between competitors rather than the absolute resource stock of the focal firm when examining the resource-performance relationship. In particular, we investigate whether the ability of a reputable seller to command a price premium is influenced by the reputation gap (i.e., the reputation differences between the focal seller and its closest competitor standardized by the reputation stock of both sellers). We test our hypotheses on 72 matched pairs of online transactions screened from more than 2,000 auctions of new mobile phones on the Polish Internet auction site Allegro. We find that the ability of a reputable seller to command a price premium (1) increases with the size of the reputation gap between the focal seller and its matched competitor, and (2) becomes increasingly smaller for each additional unit of the seller reputation gap.

Keywords: resource-based view, value added, resource gap, reputation, value appropriation, intangible resources

Suggested Citation

Obloj, Tomasz and Capron, Laurence, Role of Resource Gap and Value Appropriation: Effect of Reputation Gap on Price Premium in Online Auctions (April 15, 2010). INSEAD Working Paper, Available at SSRN: https://ssrn.com/abstract=1088586

Tomasz Obloj (Contact Author)

HEC Paris - Strategy & Business Policy ( email )

Jouy-en-Josas Cedex, 78351
France

Laurence Capron

INSEAD - Strategy ( email )

Boulevard de Constance
77305 Fontainebleau
France
+33 1 60 74 55 08 (Phone)

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