Authors: Yanbin Tu; Min Lu; Adora Holstein; Kurt Schimmel
Addresses: Department of Marketing, School of Business, Robert Morris University, Moon Township, Pennsylvania, 15108, USA ' Department of Economics and Legal Studies, School of Business, Robert Morris University, Moon Township, Pennsylvania, 15108, USA ' Department of Economics and Legal Studies, School of Business, Robert Morris University, Moon Township, Pennsylvania, 15108, USA ' College of Business, Information, and Social Sciences, Slippery Rock University, Slippery Rock, PA 16057, USA
Abstract: The objective of this paper is to model the online dynamic transaction environment, analyse the behaviour of buyers and sellers, and explore how online dynamic features affect market efficiency in electronic marketplaces. We find that under certain conditions the online dynamic environment can help increase the transaction probability, average used product quality level, market size, and total social welfare in electronic marketplaces. Using eBay's auction data, we empirically test the efficiency of electronic markets by comparing the auction process, outcome, and post-purchase evaluation between new products and used products. Our empirical findings suggest that the electronic marketplaces for used IT products such as Nintendo game consoles and TI calculators are as efficient as the new products. We contribute to the literature by demonstrating the dynamic electronic marketplace environment can improve market efficiency, and show empirical measurement results of market efficiency for electronic marketplaces.
Keywords: online auctions; dynamic transactions; lemons market; market efficiency; eBay; electronic marketplaces; electronic business; e-business; buyer behaviour; seller behaviour; uncertainty; transaction probability; average used product quality level; market size; total social welfare; used IT products; used products; information technology.
International Journal of Electronic Business, 2014 Vol.11 No.2, pp.101 - 118
Received: 08 May 2021
Accepted: 12 May 2021
Published online: 31 Mar 2014 *