TY - JOUR
T1 - Warranty, Seller Reputation, and Buyer Experience
T2 - Evidence From EBAY Used Car Auctions
AU - Che, Xiaogang
AU - Katayama, Hajime
AU - Lee, Peter
AU - Shi, Nan
N1 - Publisher Copyright:
© 2020 The Editorial Board of The Journal of Industrial Economics and John Wiley & Sons Ltd
PY - 2019/9/1
Y1 - 2019/9/1
N2 - Using data from the eBay car auction market, we test several predictions regarding warranties, seller reputation and buyer experience in the determination of the final price. We find that the presence of a warranty generates a price premium, but that its magnitude decreases when the seller has a more established reputation. Compared to private sellers, professional dealers, who are ‘repeated-game players’ in the market, benefit less from a warranty and its substitutability for seller reputation is relatively small. In addition, a buyer with greater experience tends to pay less for a warranty or for a professional dealership.
AB - Using data from the eBay car auction market, we test several predictions regarding warranties, seller reputation and buyer experience in the determination of the final price. We find that the presence of a warranty generates a price premium, but that its magnitude decreases when the seller has a more established reputation. Compared to private sellers, professional dealers, who are ‘repeated-game players’ in the market, benefit less from a warranty and its substitutability for seller reputation is relatively small. In addition, a buyer with greater experience tends to pay less for a warranty or for a professional dealership.
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U2 - 10.1111/joie.12213
DO - 10.1111/joie.12213
M3 - Article
AN - SCOPUS:85078966277
SN - 0022-1821
VL - 67
SP - 593
EP - 627
JO - Journal of Industrial Economics
JF - Journal of Industrial Economics
IS - 3-4
ER -