Transaction costs and the collection of information: presale measurement on private timber sales

Measurement efforts to reduce the uncertainty concerning theattributes of heterogeneous goods may simply redistribute wealthand result in social waste. Individuals bearing the cost ofsuch distributional measurement have incentives to develop buyingand selling practices that limit such measurement. We examine,both theoretically and empirically, the determinants of thelevel of distributional measurement efforts in a competitiveauction framework. The empirical application, which uses a sampleof private timber sales, provides strong support for the implicationsof the theoretical model of presale measurement.