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The Geography of Trade on eBay and MercadoLibre

32 Pages Posted: 23 Oct 2006  

Ali Hortacsu

University of Chicago - Department of Economics; National Bureau of Economic Research (NBER)

Francisco de Asis Martinez-Jerez

University of Notre Dame - Department of Accountancy

Jason Douglas

Independent Author

Date Written: September 2006

Abstract

We analyze geographic patterns of trade using transactions data from eBay and MercadoLibre, two large online auction sites. We find that distance continues to be an important deterrent to trade between geographically separated buyers and sellers, though at a lesser extent than has been observed in studies of non-Internet commerce. We also find a strong "home bias" towards trading with counterparties located in the same city. Further analyses suggest that cultural factors and the possibility of direct contract enforcement in case of breach are the main reasons behind the same city bias.

Suggested Citation

Hortacsu, Ali and Martinez-Jerez, Francisco de Asis and Douglas, Jason, The Geography of Trade on eBay and MercadoLibre (September 2006). NET Institute Working Paper No. 06-09. Available at SSRN: https://ssrn.com/abstract=939327 or http://dx.doi.org/10.2139/ssrn.939327

Ali Hortacsu (Contact Author)

University of Chicago - Department of Economics ( email )

1126 East 59th Street
Chicago, IL 60637
United States
773-702-5841 (Phone)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Francisco de Asis Martinez-Jerez

University of Notre Dame - Department of Accountancy ( email )

Mendoza College of Business
Notre Dame, IN 46556-5646
United States

Jason Douglas

Independent Author

No Address Available

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