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Communication and Reputation in Procurement Auctions – Some Empirical Evidence

  • Timo Heinrich


This paper studies the role of communication and reputation in market interactions using data from online procurement auctions. Not only positive reputation ratings but also engaging in communication increases a bidder’s probability of winning the auction. Messages are primarily used to reduce the asymmetric information associated with transactions.

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Paper provided by Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen in its series Ruhr Economic Papers with number 0253.

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Length: 13 pages
Date of creation: Apr 2011
Date of revision:
Handle: RePEc:rwi:repape:0253
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  1. George A. Akerlof, 1970. "The Market for "Lemons": Quality Uncertainty and the Market Mechanism," The Quarterly Journal of Economics, Oxford University Press, vol. 84(3), pages 488-500.
  2. Chen, Maggie Xiaoyang & Moore, Michael O., 2010. "Location decision of heterogeneous multinational firms," Journal of International Economics, Elsevier, vol. 80(2), pages 188-199, March.
  3. Bruno Jullien & In-Uck Park, 2011. "Seller Reputation and Trust in Pre-Trade Communication," The Centre for Market and Public Organisation 11/272, Department of Economics, University of Bristol, UK.
  4. Crawford, Vincent, 1998. "A Survey of Experiments on Communication via Cheap Talk," Journal of Economic Theory, Elsevier, vol. 78(2), pages 286-298, February.
  5. Xuepeng Liu & Mary E Lovely & Jan Ondrich, 2010. "The Location Decisions of Foreign Investors in China: Untangling the Effect of Wages Using a Control Function Approach," The Review of Economics and Statistics, MIT Press, vol. 92(1), pages 160-166, February.
  6. Gary Charness & Martin Dufwenberg, 2006. "Promises and Partnership," Econometrica, Econometric Society, vol. 74(6), pages 1579-1601, November.
  7. Patrick Bajari & Ali Hortaçsu, 2004. "Economic Insights from Internet Auctions," Journal of Economic Literature, American Economic Association, vol. 42(2), pages 457-486, June.
  8. Brosig, Jeannette, 2006. "Communication channels and induced behavior," MPRA Paper 14035, University Library of Munich, Germany.
  9. Charness, Gary B & Dufwenberg, Martin, 2006. "Promises & Partnership," University of California at Santa Barbara, Economics Working Paper Series qt0127h86v, Department of Economics, UC Santa Barbara.
  10. 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.
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