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Search and Information Frictions on Global E-Commerce Platforms: Evidence from AliExpress

Author

Listed:
  • Jie Bai
  • Maggie Chen
  • Jin Liu
  • Xiaosheng Mu
  • Daniel Yi Xu

Abstract

We study how search and information frictions shape market dynamics in global e-commerce. Observational data and self-collected quality measures from AliExpress establish the existence of search and information frictions. A randomized experiment that offers new exporters exogenous demand and information shocks demonstrates the potential role of sales accumulation in enhancing seller visibility and overcoming these demand frictions. However, we show theoretically and quantitatively that this demand-reinforcement mechanism is undermined by the large number of online exporters. Our structural model rationalizes the experimental findings and quantifies efficiency gains from reducing the number of inactive sellers.

Suggested Citation

  • Jie Bai & Maggie Chen & Jin Liu & Xiaosheng Mu & Daniel Yi Xu, 2020. "Search and Information Frictions on Global E-Commerce Platforms: Evidence from AliExpress," NBER Working Papers 28100, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:28100
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    Cited by:

    1. Gao, Fujuan & Fenoaltea, Enrico Maria & Zhang, Yi-Cheng, 2023. "Market failure in a new model of platform design with partially informed consumers," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 619(C).
    2. Carballo, Jerónimo & Rodriguez Chatruc, Marisol & Salas Santa, Catalina & Volpe Martincus, Christian, 2022. "Online business platforms and international trade," Journal of International Economics, Elsevier, vol. 137(C).
    3. Joonhyuk Yang & Navdeep S. Sahni & Harikesh S. Nair & Xi Xiong, 2024. "Advertising as Information for Ranking E-Commerce Search Listings," Marketing Science, INFORMS, vol. 43(2), pages 360-377, March.
    4. Díaz de Astarloa, Bernardo & Lotitto, Estefanía, 2023. "The landscape of B2C e-commerce marketplaces in Latin America and the Caribbean," Desarrollo Productivo 48583, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    5. Bernasconi, Mario, 2024. "Essays on labour economics and industrial organization," Other publications TiSEM c26b3dfe-a2d3-4c31-b0fc-f, Tilburg University, School of Economics and Management.
    6. Jules Depersin & B'ereng`ere Patault, 2023. "Revisiting the effect of search frictions on market concentration," Papers 2303.01824, arXiv.org.
    7. Ladrière, Maxime & Lundquist, Kathryn & Ye, Qing, 2022. "B2B e-commerce marketplaces and MSMES: Evidence of global value chain facilitation?," WTO Staff Working Papers ERSD-2022-7, World Trade Organization (WTO), Economic Research and Statistics Division.

    More about this item

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development

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