32 Pages Posted: 23 Oct 2006
Date Written: September 2006
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: 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