This website uses cookies.

By clicking the "Accept" button or continuing to browse our site, you agree to first-party and session-only cookies being stored on your device to enhance site navigation and analyze site performance and traffic. For more information on our use of cookies, please see our Privacy Policy.

  1. Home
  2. Journals
  3. American Economic Journal: Microeconomics
  4. November 2018
  5. Trading across Borders in Online Auctions

American Economic Journal:
Microeconomics

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

Trading across Borders in Online Auctions

  • Elena Krasnokutskaya
  • Christian Terwiesch
  • Lucia Tiererova
American Economic Journal: Microeconomics
vol. 10, no. 4, November 2018
(pp. 27–66)
Download Full Text PDF

Abstract

We invoke the insights from the auction literature to study trade in services using data from an online market for programming support. We find that the observed clustering of trade between countries can be rationalized through a model featuring endogenous sorting of sellers who are heterogeneous in both quality and costs across projects offered by buyers who differ in outside option and willingness to pay for quality. To accommodate the possibility of such an outcome we extend a single-auction entry model to a setting where sellers choose among multiple projects. This feature plays an important role in explaining the data and understanding the effects of various trade policies.

Citation

Krasnokutskaya, Elena, Christian Terwiesch, and Lucia Tiererova. 2018. "Trading across Borders in Online Auctions." American Economic Journal: Microeconomics, 10 (4): 27–66. DOI: 10.1257/mic.20160309

Additional Materials

JEL Classification

  • D44 Auctions
  • F14 Empirical Studies of Trade
  • L15 Information and Product Quality; Standardization and Compatibility
  • L86 Information and Internet Services; Computer Software
There are no comments for this article.
Login to Comment