Multidimensional Quality Sorting between Online and Offline Auctions: The Role of Attribute Transparency
51 Pages Posted: 24 Jan 2019
Date Written: April 2017
We analyze how sellers of used construction equipment sort products between online and offline auctions based on the quality and transparency of different machine attributes. Sellers are more likely to offer machines online if quality is high for attributes whose integrity can be measured via photo (e.g., appearance) and more likely to offer machines offline if quality is high for attributes whose integrity is more reliably evaluated in person (e.g., engine). Quality averaged across all attributes is unrelated to auction choice, meaning standard tests of adverse selection can mask the subtle but significant effects of asymmetric information in this market.
Keywords: platforms, eBay, sorting, auctions
JEL Classification: L15, L11, D44
Suggested Citation: Suggested Citation