Market Structure, Reputation, and the Value of Quality Certification | Zendy

Daniel W. Elfenbein | Zendy; Raymond Fisman | Zendy; Brian McManus | Zendy

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Market Structure, Reputation, and the Value of Quality Certification

Author(s) -

Daniel W. Elfenbein,

Raymond Fisman,

Brian McManus

Publication year - 2015

Publication title -

american economic journal microeconomics

Language(s) - English

Resource type - Journals

SCImago Journal Rank - 5.339

H-Index - 40

eISSN - 1945-7685

pISSN - 1945-7669

DOI - 10.1257/mic.20130182

Subject(s) - certification , reputation , business , quality (philosophy) , product (mathematics) , value (mathematics) , marketing , space (punctuation) , economics , computer science , social science , philosophy , geometry , mathematics , management , epistemology , machine learning , sociology , operating system

Quality certification programs help consumers identify high-quality products or sellers in markets with information asymmetries. Using data from eBay UK's online marketplace, we study how certification's impact on demand varies with market- and seller- level attributes, exploiting variation in sellers' certification status within groups of near-identical listings. The positive effects of eBay's "top rated seller" certification are stronger for categories with few other certified sellers, in more competitive markets, and for sellers with shorter records of past performance. These findings indicate certification provides more value when certification is rare, the product space is crowded, and for sellers lacking established reputations. (JEL D12, D82, L15, L86)

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