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Country-Specific Effects of Reputation and Information: A Comparison of Online Auctions in Germany, the UK, and the US

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Author Info

  • Christopher Schlägel

    ()
    (Faculty of Economics and Management, Otto-von-Guericke University Magdeburg)

  • Birgitta Wolff

    ()
    (Faculty of Economics and Management, Otto-von-Guericke University Magdeburg)

Abstract

Empirical studies on the effect of sellers’ reputation on closing prices in online auctions present mixed results. A large number of studies addresses reputational effects in one country, especially in the US. Only a small number of cross-country studies inspect the moderating role of institutional frameworks on bidder behavior. The purpose of this paper is to examine if country-specific differences in the formal and informal institutional framework influence the effects of reputation and information signals on final prices in online auctions. From the perspective of the New Institutional Economics, management decisions and individuals’ characteristics are affected by the institutional framework, which consists of cultural aspects as well as a set of social and legal rules and regulations. Therefore, bidders that are influenced by one institutional framework have different preferences, expectations, and perceptions about reputation and information in online auctions than individuals socialized by another institutional framework. In order to examine the effects of reputation and information on prices as well as to asses cross-country similarities and differences in these effects, a sample of 6,166 homogenous online auctions, conducted on the respective eBay websites in Germany, the UK, and the US, is analyzed. The results suggest that either the effects of reputation and product information variables vary significantly across countries or that different variables have an impact on prices in different countries. It can be concluded that country-specific institutional frameworks influence bidder behavior in international online auction markets.

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File URL: http://www.ww.uni-magdeburg.de/fwwdeka/femm/a2007_Dateien/2007_27.pdf
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Bibliographic Info

Paper provided by Otto-von-Guericke University Magdeburg, Faculty of Economics and Management in its series FEMM Working Papers with number 07027.

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Length: 34 pages
Date of creation: Dec 2007
Date of revision:
Handle: RePEc:mag:wpaper:07027

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Keywords: reputation; information; online auctions; cross-country studies;

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References

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  1. Geert Hofstede, 1983. "The Cultural Relativity of Organizational Practices and Theories," Journal of International Business Studies, Palgrave Macmillan, vol. 14(2), pages 75-89, June.
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  11. Axel Ockenfels & David Reiley & Abdolkarim Sadrieh, 2006. "Online Auctions," NBER Working Papers 12785, National Bureau of Economic Research, Inc.
  12. Niraj Dawar & Phillip M Parker & Lydia J Price, 1996. "A Cross-Cultural Study of Interpersonal Information Exchange," Journal of International Business Studies, Palgrave Macmillan, vol. 27(3), pages 497-516, September.
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