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  4. February 2009
  5. The Geography of Trade in Online Transactions: Evidence from eBay and MercadoLibre

American Economic Journal:
Microeconomics

ISSN 1945-7669 (Print) | ISSN 1945-7685 (Online)

The Geography of Trade in Online Transactions: Evidence from eBay and MercadoLibre

  • Ali Hortaçsu
  • F. Asís Martínez-Jerez
  • Jason Douglas
American Economic Journal: Microeconomics
vol. 1, no. 1, February 2009
(pp. 53–74)
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Abstract

We analyze geographic patterns of trade between individuals using transactions data from eBay and MercadoLibre, two large online auction sites. We find that distance continues to be an important deterrent to trade between geographically separated buyers and sellers, though to a lesser extent than has been observed in studies of non-Internet commerce between business counterparties. We also find a strong "home bias" for trading with counterparties located in the same city. Further analyses suggest that location-specific goods such as opera tickets, cultural factors, and the possibility of direct contract enforcement in case of breach may be the main reasons behind the same-city bias. (JEL D44, F11, R12)

Citation

Hortaçsu, Ali, F. Asís Martínez-Jerez, and Jason Douglas. 2009. "The Geography of Trade in Online Transactions: Evidence from eBay and MercadoLibre." American Economic Journal: Microeconomics, 1 (1): 53–74. DOI: 10.1257/mic.1.1.53

Additional Materials

JEL Classification

  • D44 Auctions
  • F11 Neoclassical Models of Trade
  • R12 Size and Spatial Distributions of Regional Economic Activity
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