Year: 2018
Type: report
Abstract: This paper examines the effect of the Internet on markets in which match-quality is important, including an analysis of the market for used books.A model in which sellers of unusual objects wait for high-value buyers to arrive brings out match quality and competition effects through which improved search technologies may increase both price dispersion and social welfare.A reduced-form empirical analysis finds support for a number of more nuanced predictions of the model in the context of the used book market, exploiting both cross-sectional differences across books and time-series differences in the wake of Amazon's acquisition and incorporation of a large used book marketplace.The paper develops a framework for structural estimation of a model based on the theory.The estimates suggest that the shift to Internet sales substantially increased both seller profits and consumer surplus.
DOI: 10.3386/w24197
Authors: Glenn Ellison, Sara Fisher Ellison
Language: English
Subfield: Strategy and Management
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W2784009180