Asymmetric information in auctions: Are resellers better appraisers?

Arbeitspapier

This paper shows that in online car auctions, resellers are better at appraising the value of the cars they are bidding on than are consumers. Using a unique data set of online car auctions, I show that differences in bidding behavior between resellers and consumers can be explained by heterogeneity in the accuracy of bidders' private signals and heterogeneity in the dispersion of private value components. I use the asymmetric ascending auction model of Hong and Shum (2003) to quantify the differences between resellers and consumers, finding that the dispersion of reseller value signals is roughly half that of consumers and simulate three different counterfactual scenarios - one in which consumers are provided with more information, one in which consumers are subsidized and one in which consumers are allowed into all-reseller auctions. Finally, I argue that the asymmetry in signal precision stems not from asymmetric information regarding the technical characteristics of a car but rather from uncertainty about the car's resale value.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: IFN Working Paper ; No. 1110

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Model Construction and Estimation ; Auctions ; Asymmetric and Private Information; Mechanism Design ; Automobiles; Other Transportation Equipment; Related Parts and Equipment
• Thema: Ascending (English) Auctions ; Asymmetric Auctions ; Experience ; Learning ; Winner's Curse ; Bid Shading ; Signal Precision ; Resellers

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Koptyug, Nikita
• Ereignis: Veröffentlichung
• (wer): Research Institute of Industrial Economics (IFN)
• (wo): Stockholm
• (wann): 2016

Weitere Informationen

• Handle: http://hdl.handle.net/10419/175047
• Letzte Aktualisierung: 10.03.2025, 11:45 MEZ