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

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Author Info
Ali Hortacsu
F. Asis Martinez-Jerez
Jason Douglas

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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)

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Publisher Info
Article provided by American Economic Association in its journal American Economic Journal: Microeconomics.

Volume (Year): 1 (2009)
Issue (Month): 1 (February)
Pages: 53-74
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Handle: RePEc:aea:aejmic:v:1:y:2009:i:1:p:53-74

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  1. Gary E. Bolton & Ben Greiner & Axel Ockenfels, 2009. "Engineering Trust - Reciprocity in the Production of Reputation Information," Discussion Papers 2009-02, School of Economics, The University of New South Wales. [Downloadable!]
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This page was last updated on 2009-12-22.

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