STICERD Industrial Organisation Seminars
The Role of Quality in On-line Service Markets
Elena Krasnokutskaya (Johns Hopkins University), joint with Kyungchul Song (University of British Columbia) and Xun Tang (University of Pennsylvania)
Monday 23 June 2014 13:00 - 14:30
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About this event
We study an on-line market for programming services where providers are chosen through multi-attribute auctions, a mechanism that takes into account seller's non-price characteristics as well as his bid. We develop empirical methodology for recovering the joint distribution of buyers' outside options and weights for sellers' attributes as well as other primitives of the model while allowing that an important component of seller's quality known to buyer may be unobserved to the researcher. The methodology is designed to accommodate two important features of such markets: buyer-specific choice sets and high turn-over of sellers. Our empirical results confirm that (unobserved) quality plays an important role in this environment. We also find that internet enables buyers to substantially improve on their outside (local) option with the larger part of gains arising due to the access to low-cost per unit of quality providers.
Related
Industrial Organisation seminars are held on Mondays in term time at 12:00-13:30, in person in SAL 2.04, unless specified otherwise.
Seminar organiser: Alessandro Gavazza.
For further information please contact Sadia Ali: s.ali43@lse.ac.uk.
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