Adverse Selection and Moral Hazard in Anonymous Markets
We study the effects of improvements in eBay's rating mechanism on seller exit and continuing sellers' behavior. Following a large sample of sellers over time, we exploit the fact that the rating mechanism was changed to reduce strategic bias in buyer rating. That improvement did not lead to increased exit of poorly rated sellers. Yet, buyer valuation of the staying sellers – especially the poorly rated ones – improved significantly. By our preferred interpretation, the latter effect results from increased seller effort; also, when sellers have the choice between exiting (a reduction in adverse selection) and improved behavior (a reduction in moral hazard), then they prefer the latter because of lower cost.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
| Length: | |
| Date of creation: | Jun 2013 |
| Date of revision: | |
| Handle: | RePEc:cpr:ceprdp:9501 |
| Contact details of provider: | Postal: Phone: 44 - 20 - 7183 8801 Fax: 44 - 20 - 7183 8820
|
| Order Information: | Email: |
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Aviva Aron-Dine & Liran Einav & Amy Finkelstein & Mark Cullen, 2012.
"Moral hazard in health insurance: How important is forward looking behavior?,"
Discussion Papers
11-007, Stanford Institute for Economic Policy Research.
- Aviva Aron-Dine & Liran Einav & Amy Finkelstein & Mark R. Cullen, 2012. "Moral Hazard in Health Insurance: How Important Is Forward Looking Behavior?," NBER Working Papers 17802, National Bureau of Economic Research, Inc.
- Michael Anderson & Jeremy Magruder, 2012. "Learning from the Crowd: Regression Discontinuity Estimates of the Effects of an Online Review Database," Economic Journal, Royal Economic Society, vol. 122(563), pages 957-989, 09.
- Akerlof, George A, 1970. "The Market for 'Lemons': Quality Uncertainty and the Market Mechanism," The Quarterly Journal of Economics, MIT Press, vol. 84(3), pages 488-500, August.
- Andrew Kato & Ginger Jin, 2004.
"Dividing online and offline: A case study,"
Natural Field Experiments
00276, The Field Experiments Website.
- Ginger Zhe Jin & Andrew Kato, 2007. "Dividing Online and Offline: A Case Study," Review of Economic Studies, Oxford University Press, vol. 74(3), pages 981-1004.
- Jeffrey A. Livingston, 2005. "How Valuable Is a Good Reputation? A Sample Selection Model of Internet Auctions," The Review of Economics and Statistics, MIT Press, vol. 87(3), pages 453-465, August.
- Jaap H. Abbring & Pierre-Andre Chiappori, 2004.
"Moral Hazard and Dynamic Insurance Data,"
2004 Meeting Papers
316, Society for Economic Dynamics.
- Jaap H. Abbring & Pierre-André Chiappori & Jean Pinquet, 2003. "Moral Hazard and Dynamic Insurance Data," Journal of the European Economic Association, MIT Press, vol. 1(4), pages 767-820, 06.
- Klein, Tobias J. & Lambertz, Christian & Spagnolo, Giancarlo & Stahl, Konrad O., 2006.
"Last Minute Feedback,"
Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems
62, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
- Klein, Tobias & Lambertz, Christian & Spagnolo, Giancarlo & Stahl, Konrad, 2006. "Last Minute Feedback," CEPR Discussion Papers 5693, C.E.P.R. Discussion Papers.
- Chrysanthos Dellarocas & Charles A. Wood, 2008. "The Sound of Silence in Online Feedback: Estimating Trading Risks in the Presence of Reporting Bias," Management Science, INFORMS, vol. 54(3), pages 460-476, March.
- Liran Einav & Amy Finkelstein & Stephen P. Ryan & Paul Schrimpf & Mark R. Cullen, 2013.
"Selection on Moral Hazard in Health Insurance,"
American Economic Review,
American Economic Association, vol. 103(1), pages 178-219, February.
- Liran Einav & Amy Finkelstein & Stephen P. Ryan & Paul Schrimpf & Mark R. Cullen, 2011. "Selection on Moral Hazard in Health Insurance," NBER Working Papers 16969, National Bureau of Economic Research, Inc.
- Liran Einav & Amy Finkelstein & Stephen Ryan & Paul Schrimpf & Mark Cullen, 2011. "Selection on Moral Hazard in Health Insurance," Discussion Papers 10-027, Stanford Institute for Economic Policy Research.
- David Dranove & Ginger Zhe Jin, 2010.
"Quality Disclosure and Certification: Theory and Practice,"
NBER Working Papers
15644, National Bureau of Economic Research, Inc.
- David Dranove & Ginger Zhe Jin, 2010. "Quality Disclosure and Certification: Theory and Practice," Journal of Economic Literature, American Economic Association, vol. 48(4), pages 935-63, December.
- Amy Finkelstein & James Poterba, 2000.
"Adverse Selection in Insurance Markets: Policyholder Evidence from the U.K. Annuity Market,"
NBER Working Papers
8045, National Bureau of Economic Research, Inc.
- Amy Finkelstein & James Poterba, 2004. "Adverse Selection in Insurance Markets: Policyholder Evidence from the U.K. Annuity Market," Journal of Political Economy, University of Chicago Press, vol. 112(1), pages 183-208, February.
- Paul Resnick & Richard Zeckhauser & John Swanson & Kate Lockwood, 2006.
"The value of reputation on eBay: A controlled experiment,"
Experimental Economics,
Springer, vol. 9(2), pages 79-101, June.
- Resnick, Paul & Zeckhauser, Richard & Swanson, John & Lockwood, Kate, 2003. "The Value of Reputation on eBay: A Controlled Experiment," Working Paper Series rwp03-007, Harvard University, John F. Kennedy School of Government.
- Patrick Bajari & Han Hong & Ahmed Khwaja, 2006. "Moral Hazard, Adverse Selection and Health Expenditures: A Semiparametric Analysis," NBER Working Papers 12445, National Bureau of Economic Research, Inc.
- Melnik, Mikhail I & Alm, James, 2002. "Does a Seller's Ecommerce Reputation Matter? Evidence from eBay Auctions," Journal of Industrial Economics, Wiley Blackwell, vol. 50(3), pages 337-49, September.
- Jaap H. Abbring & James J. Heckman & Pierre-André Chiappori & Jean Pinquet, 2003. "Adverse Selection and Moral Hazard In Insurance: Can Dynamic Data Help to Distinguish?," Journal of the European Economic Association, MIT Press, vol. 1(2-3), pages 512-521, 04/05.
This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.
When requesting a correction, please mention this item's handle: RePEc:cpr:ceprdp:9501. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.