used goods markets
Recently Published Documents


TOTAL DOCUMENTS

8
(FIVE YEARS 0)

H-INDEX

4
(FIVE YEARS 0)

2011 ◽  
Vol 101 (4) ◽  
pp. 1535-1546 ◽  
Author(s):  
Gregory Lewis

Since Akerlof (1970), economists have understood the adverse selection problem that information asymmetries can create in used goods markets. The remarkable growth in online used goods auctions thus poses a puzzle. Part of the solution is that sellers voluntarily disclose their private information on the auction web page. This defines a precise contract -- to deliver the car shown for the closing price -- which helps protect the buyer from adverse selection. I test this theory using data from eBay Motors, finding that online disclosures are important price determinants, and that disclosure costs impact both the level of disclosure and prices. (JEL D44, D82, L81)



2010 ◽  
Vol 29 (3) ◽  
pp. 540-560 ◽  
Author(s):  
Shuya Yin ◽  
Saibal Ray ◽  
Haresh Gurnani ◽  
Animesh Animesh




Author(s):  
Loren K. Smith

Abstract Because of linkages between markets for new and used durable goods, economic policies that target new durable good markets, such as tax incentives or antitrust legislation, are likely to affect used goods markets as well. I use a simple theoretical model to illustrate how an exogenous shock to prices of new durable goods affects prices and trade frequencies of corresponding used goods. The model predicts that if prices of new durable goods increase, then prices of used goods will also increase. In addition, if the distribution of consumer preferences for quality are relatively concentrated among those with a high preference for quality, then trade in used good markets will slow. The predictions of the model are supported by an empirical analysis of the market for new and used wide-body commercial aircraft following a major change in effective aircraft prices caused by the Tax Reform Act of 1986. The Act effectively increased prices of new aircraft by an average of $6.5 million. At the same time, used aircraft prices increased by an average of $2.9 million to $7.7 million and used aircraft sales fell between 23 to 36 percent. These results suggest that policies that affect new durable good markets can have significant effects on used markets as well.



2005 ◽  
Vol 47 ◽  
pp. e71-e88
Author(s):  
Pascal Chantelat ◽  
Bénédicte Vignal


1999 ◽  
Vol 89 (5) ◽  
pp. 1097-1115 ◽  
Author(s):  
Igal Hendel ◽  
Alessandro Lizzeri

We present a dynamic model of adverse selection to examine the interactions between new and used goods markets. We find that the used market never shuts down, the volume of trade can be large, and distortions are lower than previously thought. New cars prices can be higher under adverse selection than in its absence. An extension to several brands that differ in reliability leads to testable predictions of the effects of adverse selection. Unreliable brands have steeper price declines and lower volumes of trade. We contrast these predictions with those of a model where brands physically depreciate at different rates. (JEL D82, L15)



Sign in / Sign up

Export Citation Format

Share Document