Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/89649
Authors: 
Klein, Tobias J.
Lambertz, Christian
Stahl, Konrad O.
Year of Publication: 
2013
Series/Report no.: 
CESifo Working Paper 4552
Abstract: 
We study the effects of improvements in market transparency on eBay on seller exit and continuing sellers' behavior. An improvement in market transparency by reducing strategic bias in buyer ratings led to a significant increase in buyer valuation especially of sellers rated poorly prior to the change, but not to an increase in seller exit. When sellers had the choice between exiting a reduction in adverse selection and improved behavior a reduction in moral hazard , they preferred the latter because of lower cost. Increasing market transparency improves on market outcomes.
Subjects: 
anonymous markets
adverse selection
moral hazard
reputation building mechanisms
market transparency
market design
JEL: 
D47
D83
L15
Document Type: 
Working Paper

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