Search and Information Frictions on Global E-Commerce Platforms: Evidence from Aliexpress

75 Pages Posted: 16 Nov 2020 Last revised: 19 Sep 2021

See all articles by Jie Bai

Jie Bai

Harvard University - Harvard Kennedy School (HKS)

Maggie Xiaoyang Chen

George Washington University

Jin Liu

New York University (NYU) - New York University

Daniel Yi Xu

Duke University

Multiple version iconThere are 2 versions of this paper

Date Written: November 2020

Abstract

We study how search and information frictions shape market dynamics in global e-commerce. Observational data and self-collected quality measures from AliExpress establish the existence of search and information frictions. A randomized experiment that offers new exporters exogenous demand and information shocks demonstrates the potential role of sales accumulation in enhancing seller visibility and overcoming these demand frictions. However, we show theoretically and quantitatively that this demand-reinforcement mechanism is undermined by the large number of online exporters. Our structural model rationalizes the experimental findings and quantifies efficiency gains from reducing the number of inactive sellers.

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Suggested Citation

Bai, Jie and Chen, Maggie Xiaoyang and Liu, Jin and Yi Xu, Daniel, Search and Information Frictions on Global E-Commerce Platforms: Evidence from Aliexpress (November 2020). NBER Working Paper No. w28100, Available at SSRN: https://ssrn.com/abstract=3731270

Jie Bai (Contact Author)

Harvard University - Harvard Kennedy School (HKS) ( email )

79 John F. Kennedy Street
Cambridge, MA 02138
United States

Maggie Xiaoyang Chen

George Washington University ( email )

710 21st Street NW
Washington, DC 20052
United States

Jin Liu

New York University (NYU) - New York University

Daniel Yi Xu

Duke University ( email )

100 Fuqua Drive
Durham, NC 27708-0204
United States

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