Presenting Author

son ngoc bui

Paper Type

Research-in-Progress Paper

Abstract

Online markets play an important role for both online sellers and online buyers. Previous research has identified problems of information asymmetry in the online used goods markets, this research explore whether there are similar problems in the new-goods online markets. Grounded in “lemon market” theory, this study used panel data captured from eBay Motors. Employing Ordinary Least Squares analysis, we find information asymmetry problems exist in online new-goods markets. Our findings also indicate that product uncertainty and seller uncertainty in online new-goods market does not significantly impact the bidding price of new cars. This could indicate that the proxies used to measure product and seller uncertainty might not have the same impact in both used-car markets and new-car markets.

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Adverse Selection in Online New-Goods Market: An Analysis of Product Uncertainty and Seller Uncertainty

Online markets play an important role for both online sellers and online buyers. Previous research has identified problems of information asymmetry in the online used goods markets, this research explore whether there are similar problems in the new-goods online markets. Grounded in “lemon market” theory, this study used panel data captured from eBay Motors. Employing Ordinary Least Squares analysis, we find information asymmetry problems exist in online new-goods markets. Our findings also indicate that product uncertainty and seller uncertainty in online new-goods market does not significantly impact the bidding price of new cars. This could indicate that the proxies used to measure product and seller uncertainty might not have the same impact in both used-car markets and new-car markets.