Selling mechanisms for perishable goods: An empirical analysis of an online resale market for event tickets

This paper assesses the value of the availability of menus of different selling mechanisms to agents in an online platform in the context of scarce perishable goods. By analyzing the choice between auctions and posted prices in the context of National Football League tickets offered on eBay, it esti...

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Bibliographic Details
Published in:Quantitative marketing and economics 2021-06, Vol.19 (2), p.127-178
Main Author: Waisman, Caio
Format: Article
Language:English
Subjects:
Business and Management
Economic Theory/Quantitative Economics/Mathematical Methods
Economics
Finance
Insurance
Management
Marketing
Perishable goods
Statistics for Business
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Summary:This paper assesses the value of the availability of menus of different selling mechanisms to agents in an online platform in the context of scarce perishable goods. By analyzing the choice between auctions and posted prices in the context of National Football League tickets offered on eBay, it estimates a structural model in which heterogeneous, forward-looking sellers optimally choose which selling mechanism to use and its features. Counterfactual results suggest that sellers would experience an average 87.37% decrease in expected revenues if auctions were removed and just a 4.34% decrease if posted prices were. In turn, buyers would benefit from an auction-only platform since the expected number of transactions would increase and expected transaction prices would decrease. These results suggest that while sellers benefit from menus of different selling mechanisms, the same does not hold for buyers. Thus, the implications for a platform, which should take into account both sides of the market, are ambiguous.
ISSN:1570-7156
1573-711X
DOI:10.1007/s11129-021-09236-z