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Pigs in Cyberspace: A Natural Experiment Testing Differences between Online and Offline Club-Pig Auctions

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  • Roe, Brian E.
  • Wyszynski, Timothy E.
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    Abstract

    We find sale prices and net revenues received by sellers in the Midwestern club pig market are higher at traditional face-to-face auctions than at comparable Internet auctions. The comparison overcomes adverse selection issues that commonly plague such analyses by using data from sellers that allocated pigs to both markets based solely on exogenous differences in dates between online and offline auctions. Furthermore, both auctions feature ascending price formats with ‘soft-endings’ and remaining quality variation is controlled by using detailed information on animal, seller and event characteristics. The results suggest that the higher prices and net revenues from traditional auctions are attributable to remaining differences in auction format and buyer pools. Furthermore, sellers may be willing to forgo higher revenues to capture the convenience and flexibility provided by Internet auctions, to reach buyers in other regions that face different seasonality in demand and to stimulate demand for privately negotiated sales.

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    Bibliographic Info

    Paper provided by Agricultural and Applied Economics Association in its series 2011 Annual Meeting, July 24-26, 2011, Pittsburgh, Pennsylvania with number 102940.

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    Date of creation: Apr 2011
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    Handle: RePEc:ags:aaea11:102940

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    Keywords: auctions; electronic commerce; two-sided markets; livestock marketing; hedonic models; Agribusiness; Industrial Organization; Livestock Production/Industries; Marketing; D44; Q13;

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