CFDP 3004

Author(s): 
CFDP Title: 

Selling 'Money' on EBay: a Field Study of Surplus Division


Publication Date: August, 2017

Pages: 37pp

Abstract: 

We study the division of trade surplus in a natural field experiment on German eBay. Acting as a seller, we offer Amazon gift cards with face values of up to 500 Euro. A random selection of buyers, the subjects of our experiment, make price offers according to the rules of eBay. Using a novel decomposition method, we infer the offered shares of trade surplus from the data and find that the average share proposed to the seller amounts to about $30 \%$. Additionally, we document: (i) insignificant effects of stake size; (ii) poor use of strategically relevant public information; and (iii) differences between East and West German subjects.

Keywords:

Field experiment, Surplus division, Bargaining, Internet trade, eBay


JEL Classifications: 
JEL Classification: 
C72, C93, C57