Date of Award
Doctor of Philosophy (PhD)
F. Andrew Hanssen
Information disclosure can help overcome problems associated with asymmetric information. For example, Lewis (2011) argues that sellers with high-quality products will reveal more detailed information about their products, allowing them to charge higher prices. Using data from eBay marketplace, I empirically study the effect of information disclosure in mitigating asymmetric information. I find that auctions generally sell for a higher price when sellers disclose more information, and this effect appears stronger when the quality level of the product is more uncertain. However, when other quality assurance mechanisms are available, sellers may not rely on information disclosure purely as a signal quality. I find that some experienced eBay sellers maintain a strong reputation by disclosing more information when selling items of lower quality.
Reputation mechanism is used by the marketplace to mitigate the asymmetric information problem. Using a unique dataset from eBay, this study explores the role of the bidder’s experience in evaluating the seller’s reputation measures of feedback score and Top Rated Plus badge (TRP). The results found that the bidders’ evaluation of the sellers’ reputation measures vary with former’s level of experience. The findings indicate that feedback scores provide more value when bidders have experience with the eBay feedback system while TRP provides more value for inexperienced bidders.
Eddhir, Ahmed, "Essays on the Industrial Organization of Internet Markets" (2020). All Dissertations. 2700.