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Reputation, Certification, Warranties, and Information as Remedies for Seller-Buyer Information Asymmetries: Lessons from the Online Comic Book Market

Author

Listed:
  • Michaël Dewally

    (Marquette University)

  • Louis Ederington

    (University of Oklahoma)

Abstract

Signaling strategies that sellers of higher-quality products or securities employ to differentiate their products include (1) development of a reputation for quality, (2) third-party certification, (3) warranties, and (4) information disclosure. These signaling strategies are compared using data from the online auction market for classic comic books. This market's advantages include that (1) the information asymmetry is substantial, (2) good measures of reputation are available, and (3) all four signals are common. We explore which signals are strongest and why, which are substitutes or complements, and how choice among the other three strategies depends on the reputation of the seller.

Suggested Citation

  • Michaël Dewally & Louis Ederington, 2006. "Reputation, Certification, Warranties, and Information as Remedies for Seller-Buyer Information Asymmetries: Lessons from the Online Comic Book Market," The Journal of Business, University of Chicago Press, vol. 79(2), pages 693-730, March.
  • Handle: RePEc:ucp:jnlbus:v:79:y:2006:i:2:p:693-730
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    Citations

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    Cited by:

    1. Liu, Kang Ernest & Shiu, Ji-Liang & Sun, Chia-Hung, 2013. "How different are consumers in Internet auction markets? Evidence from Japan and Taiwan," Japan and the World Economy, Elsevier, vol. 28(C), pages 1-12.
    2. Baye, Michael R. & De los Santos, Babur & Wildenbeest, Matthijs R., 2016. "What’s in a name? Measuring prominence and its impact on organic traffic from search engines," Information Economics and Policy, Elsevier, vol. 34(C), pages 44-57.
    3. Yamamura, Eiji, 2013. "Externality of young children on parents’ watching of anime: Evidence from Japanese micro data," MPRA Paper 46878, University Library of Munich, Germany.
    4. Jolivet, Grégory & Jullien, Bruno & Postel-Vinay, Fabien, 2016. "Reputation and prices on the e-market: Evidence from a major French platform," International Journal of Industrial Organization, Elsevier, vol. 45(C), pages 59-75.
    5. Gary Bolton & Ben Greiner & Axel Ockenfels, 2013. "Engineering Trust: Reciprocity in the Production of Reputation Information," Management Science, INFORMS, vol. 59(2), pages 265-285, January.
    6. Reuber, A. Rebecca & Fischer, Eileen, 2011. "International entrepreneurship in internet-enabled markets," Journal of Business Venturing, Elsevier, vol. 26(6), pages 660-679.
    7. repec:spr:infosf:v:17:y:2015:i:1:d:10.1007_s10796-012-9394-5 is not listed on IDEAS
    8. Clerides, Sofronis & Nearchou, Paris & Pashardes, Panos, 2008. "Intermediaries as quality assessors: Tour operators in the travel industry," International Journal of Industrial Organization, Elsevier, vol. 26(1), pages 372-392, January.
    9. John Wyburn & Paul Roach, 2012. "An hedonic analysis of American collectable comic-book prices," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 36(4), pages 309-326, November.
    10. Shiu, Ji-Liang & Sun, Chia-Hung D., 2014. "Modeling and estimating returns to seller reputation with unobserved heterogeneity in online auctions," Economic Modelling, Elsevier, vol. 40(C), pages 59-67.
    11. Sonja Brangewitz & Behnud Djawadi & Rene Fahr & Claus-Jochen Haake, 2014. "Quality Choices and Reputation Systems in Online Markets - An Experimental Study," Working Papers CIE 85, Paderborn University, CIE Center for International Economics.
    12. Vandana Ramachandran & Siva Viswanathan & Sanjay Gosain, 2007. "The Impact of Online Information on the Purchase of Certified Used Cars," Working Papers 07-37, NET Institute.
    13. Nicolau, Juan L., 2011. "The decision to raise firm value through a sports-business exchange: How much are Real Madrid's goals worth to its president's company's goals?," European Journal of Operational Research, Elsevier, vol. 215(1), pages 281-288, November.
    14. Eiji Yamamura, 2014. "The effect of young children on their parents’ anime-viewing habits: evidence from Japanese microdata," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 38(4), pages 331-349, November.
    15. Eiji Yamamura & Inyong Shin, 2016. "Effect of consuming imported cultural goods on trading partners’ tolerance toward immigrants: the case of Japanese anime in Korea," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 152(4), pages 681-703, November.
    16. Fernando, Chitru S. & Gatchev, Vladimir A. & May, Anthony D. & Megginson, William L., 2015. "Prestige without purpose? Reputation, differentiation, and pricing in U.S. equity underwriting," Journal of Corporate Finance, Elsevier, vol. 32(C), pages 41-63.
    17. Behnud Djawadi & Rene Fahr & Claus-Jochen Haake & Sonja Recker, 2017. "Maintaing vs. Milking Good Reputation when Customer Feedback is Inaccurate," Working Papers CIE 106, Paderborn University, CIE Center for International Economics.
    18. Yamamura, Eiji & Shin, Inyong, 2014. "Effect of consuming imported cultural goods on tolerance for immigrants from trade partners: Case of Japanese anime in Korea," MPRA Paper 58467, University Library of Munich, Germany.

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