Department of Economics CB 3305
University of North Carolina
Chapel Hill, NC 27599
Institutional Affiliation: University of North Carolina
NBER Working Papers and Publications
|August 2019||The Impact of Socioeconomic and Cultural Differences on Online Trade|
with Daniel W. Elfenbein, Raymond Fisman: w26197
We use U.S. eBay data to investigate how trade is influenced by differences in socioeconomic characteristics, tastes, and trust. States’ similarity in cultural characteristics (ethnicity, religious affiliations, and political behavior) is predictive of online trade; cultural similarity similarly predicts trade between finer (three-digit zip code) geographies. The culture-trade relationship is mediated in part by consumers’ tastes, and is stronger for transactions with sellers who lack extensive reputations or certification, suggesting that consumers infer seller trustworthiness from cultural similarity. There is no correlation between cultural similarity and buyer satisfaction, consistent with perceived differences in trustworthiness not being validated by actual transactions.
|March 2018||Does Cheap Talk Affect Market Outcomes? Evidence from eBay|
with Daniel W. Elfenbein, Raymond Fisman: w24437
We study the use of and response to cheap talk by firms and their consumers, focusing on unverifiable promises of charitable donations on eBay. For transactions during March 2005 – May 2006, cheap talk listings have lower sales probabilities but sell at higher prices when they are successful. The negative relationship between cheap talk and sales is concentrated in the months following Hurricane Katrina, a time when both verifiable and unverifiable charity-related listings increased dramatically. Finally, we show that cheap talk sellers have significantly lower quality ratings than sellers who make verifiable donations. Collectively, our results suggest that most buyers (justifiably) avoid cheap talk listings when credible quality signals are available, thus limiting the extent of cheap ta...
Published: Daniel W. Elfenbein & Raymond Fisman & Brian McManus, 2019. "Does Cheap Talk Affect Market Outcomes? Evidence from eBay," American Economic Journal: Applied Economics, vol 11(4), pages 305-326.
|April 2014||Market Structure, Reputation, and the Value of Quality Certification|
with Daniel Elfenbein, Raymond Fisman: w20074
Quality certification programs help consumers to identify high-quality products or sellers in markets with information asymmetries. Using data from eBay UK's online marketplace, we study how certification's impact on consumer demand varies with market- and seller-level attributes, exploiting quasi-experimental variation in sellers' certification status. The positive effects of eBay's "top rated seller" certification are stronger for categories with relatively few other certified sellers, in more competitive markets, and for sellers with shorter records of past performance. These findings indicate certification provides its greatest value when certification is rare, the product space is crowded, and for sellers lacking established reputations.
Published: Daniel W. Elfenbein & Raymond Fisman & Brian McManus, 2015. "Market Structure, Reputation, and the Value of Quality Certification," American Economic Journal: Microeconomics, American Economic Association, vol. 7(4), pages 83-108, November. citation courtesy of
|December 2009||Reputation, Altruism, and the Benefits of Seller Charity in an Online Marketplace|
with Daniel Elfenbein, Raymond Fisman: w15614
We investigate the impact of charity tie-ins on transaction probabilities and sale prices using a large database of eBay auctions. We examine "natural experiments" of precisely matched clusters of charity and non-charity auctions with identical titles, subtitles, sellers, and start prices. We find a 6 to 14 percentage point increase in sale probability and a 2 to 6 percent greater maximum bid for charity items, depending on the fraction of auction proceeds that is donated to charity. The impact on sale probability and price is most pronounced among sellers without extensive eBay histories, suggesting that consumers view charity as a signal of seller quality and a substitute for reputation. We also find that charity-tied products by all sellers are more likely to sell (and at higher pri...
Published: Charity as a substitute for reputation: Evidence from an online marketplace (with Daniel Elfenbein and Brian McManus), Review of Economic Studies, 2012.