FINANCIAL VALUE OF REPUTATION: EVIDENCE FROM THE eBAY AUCTIONS OF GMAIL INVITATIONS* |
| |
| Authors: | QIN LEI |
| |
| Affiliation: | Southern Methodist University, Edwin L. Cox School of Business, Department of Finance, P.O. Box 750333, Dallas, Texas 75275‐0333, U.S.A.
e‐mail:leiq@umich.edu |
| |
| Abstract: | In this article, I utilize a unique collection of auctions on eBay to study the influence of seller reputation on auction outcomes. In a market of homogeneous goods with non‐enforceable contracts, I find that sellers who improve their reputation by one quintile from the lowest, experience a 6.2% higher probability of sale and a 6.1% hike in valuation after adjusting for truncation bias from failed auctions and explicitly controlling for unobservable seller heterogeneity. This study also shows that in addition to a dimension of reputation universal across different product markets, the product‐specific dimension of reputation significantly affects the auction outcomes. |
| |
| Keywords: | |
|
|
