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Role of value signals in information asymmetry markets

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  • Ke, Da
  • Li, Xuan
  • Zheng, Qing

Abstract

The second-hand car online auction market demonstrates how value signals influence bidders in information asymmetry markets. Appraised value and starting price serve as value signals, similar to list prices in traditional sales. To facilitate comparisons of items with varying appraised value, we replace starting price and final price with relative values based on appraised value. Our study described differences among different appraised value. The results indicate number of bidders positively influences relative starting price and total price increments while starting price positively moderates this influence, both varying across appraised value levels. Our research reduces market imbalance while revealing the relationship between appraised value and starting price in the second-hand car market.

Suggested Citation

  • Ke, Da & Li, Xuan & Zheng, Qing, 2025. "Role of value signals in information asymmetry markets," Finance Research Letters, Elsevier, vol. 72(C).
    • Handle: RePEc:eee:finlet:v:72:y:2025:i:c:s1544612324014727
    DOI: 10.1016/j.frl.2024.106443
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