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- Publisher
- Wiley
- Copyright
- Copyright © 2004 Wiley Subscription Services, Inc., A Wiley Company
- ISSN
- 0022-1821
- eISSN
- 1467-6451
- DOI
- 10.1111/j.0022-1821.2004.00237.x
- Publisher site
- See Article on Publisher Site
Abstract
We analyze adverse selection costs in online stamp auctions, based on a comparison of prices on eBay with those of matched stamps at a specialty stamps auction site in the U.S., Michael Rogers, Inc. (MR), which we know a priori has low quality uncertainty. We find that buyer prices are 10–15% lower on eBay as compared to MR, and the price difference, increases with the value of the stamps. Consistent with this adverse selection discount we find that the seller reputation mechanism on eBay has an economically modest, although statistically significant, effect on auction price and probability of sale.
Journal
The Journal of Industrial Economics – Wiley
Published: Dec 1, 2004