Information asymmetry and small business in online auction market

Information asymmetry and small business in online auction market This paper explores how seller reputation affects auction prices using detailed Taiwanese data. Our empirical results show that returns to reputation are nonlinear and differ considerably across different reputation scores. Marginal returns to scores drop sharply after the first reputation quartile, indicating that building up sellers’ reputation is extremely important, especially in the early stage. Our study reveals that the mechanism of seller reputations is effective in mitigating asymmetric information in online auctions. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Small Business Economics Springer Journals

Information asymmetry and small business in online auction market

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Publisher
Springer US
Copyright
Copyright © 2008 by Springer Science+Business Media, LLC.
Subject
Business and Management; Management; Microeconomics; Entrepreneurship; Industrial Organization
ISSN
0921-898X
eISSN
1573-0913
D.O.I.
10.1007/s11187-008-9160-8
Publisher site
See Article on Publisher Site

Abstract

This paper explores how seller reputation affects auction prices using detailed Taiwanese data. Our empirical results show that returns to reputation are nonlinear and differ considerably across different reputation scores. Marginal returns to scores drop sharply after the first reputation quartile, indicating that building up sellers’ reputation is extremely important, especially in the early stage. Our study reveals that the mechanism of seller reputations is effective in mitigating asymmetric information in online auctions.

Journal

Small Business EconomicsSpringer Journals

Published: Jan 6, 2009

References

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