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Essays on Trade, Trust, and Information Technology

Hui, Xiang
http://rave.ohiolink.edu/etdc/view?acc_num=osu1462800111

Abstract Details

2016, Doctor of Philosophy, Ohio State University, Economics.
Information technology (IT) facilitates trade by reducing information frictions among market participants. In the dissertation, we study whether the efficiency in IT-enabled marketplaces can be further increased by two types of policies, namely export promotion policies and warranty policies. Specifically, we conduct two case studies on the eBay marketplace. In Chapter 1, I study a randomized field experiment that generates exogenous variation in the export entry cost for U.S. sellers on eBay. Specifically, eBay’s global shipping program (GSP) removes sellers’ “hassle” cost of understanding the export procedures, as eBay handles the international shipping and customs clearance for them. I identify the program’s distributional impacts on sellers of different sizes using an experiment: Prior to the full launch of the GSP, 20% of eBay sellers selected randomly were offered the opportunity of early enrollments in the program. The intent-to-treat (ITT) estimates show that the program caused a 2.7% increase in exports on eBay. The effect occurred exclusively on the extensive margin of exports defined on the seller or seller-destination level, and from small and medium-sized sellers. I exploit rich micro data to show that the result is driven by a reduction in entry cost, not by changes in variable cost or demand. Finally, the full launch of the GSP caused a 1% rise in product variety, an increase in marketplace quality, and an increase in competition in foreign markets, which is larger for differentiated ii goods markets. These findings shed light on the 2012 state of the union address of facilitating exports from small and medium-sized enterprises (SME), and suggest that reducing entry costs is the key for promoting their exports. In Chapter 2, we focus on a trust policy that mitigates inefficiencies arising from asymmetric information. Traditionally, some markets rely on government interventions, while others rely on reputation systems, warranties, or guarantees. This paper explores the impact of two mechanisms, namely reputation badges and buyer protection programs, and their interaction on eBay’s marketplace. Adding buyer protection reduces the premium for the reputation badge and increases efficiency in the marketplace. These efficiency gains are achieved by reducing moral hazard through an increase in sellers’ quality and by reducing adverse selection through a higher exit rate for low-quality sellers. Our estimates suggest buyer protection increases the total welfare by 2.9%.
Maryam Saeedi (Advisor)
John Kagel (Committee Member)
Yang Huanxing (Committee Member)
Blevins Jason (Committee Member)
116 p.
Economics

Recommended Citations

Citations

  • Hui, X. (2016). Essays on Trade, Trust, and Information Technology [Doctoral dissertation, Ohio State University]. OhioLINK Electronic Theses and Dissertations Center. http://rave.ohiolink.edu/etdc/view?acc_num=osu1462800111

    APA Style (7th edition)

  • Hui, Xiang. Essays on Trade, Trust, and Information Technology. 2016. Ohio State University, Doctoral dissertation. OhioLINK Electronic Theses and Dissertations Center, http://rave.ohiolink.edu/etdc/view?acc_num=osu1462800111.

    MLA Style (8th edition)

  • Hui, Xiang. "Essays on Trade, Trust, and Information Technology." Doctoral dissertation, Ohio State University, 2016. http://rave.ohiolink.edu/etdc/view?acc_num=osu1462800111

    Chicago Manual of Style (17th edition)

osu1462800111
435
© 2016, all rights reserved.
This open access ETD is published by The Ohio State University and OhioLINK.