Internet and the Efficiency of Decentralized Markets: Evidence from Automobiles

12 Pages Posted: 21 Sep 2013

See all articles by David Rapson

David Rapson

University of California, Davis

Pasquale Schiraldi

London School of Economics & Political Science (LSE) - Department of Economics

Date Written: April 14, 2013

Abstract

We estimate the effect of Internet on volume of trade in a major distributed marketplace. From 1997 to 2007, a period during which residential Internet use tripled, Internet increased the volume of used cars traded in California by 7.2 percent. This implies a substantial welfare gain due to reductions in market frictions. Additional gains may accrue when externalities are associated with the rate of vehicle fleet turnover (e.g. with respect to greenhouse gas emissions from fuel economy standards).

Keywords: Decentralized markets, transaction costs, information, Internet, automobiles

JEL Classification: D1, D8, L9

Suggested Citation

Rapson, David and Schiraldi, Pasquale, Internet and the Efficiency of Decentralized Markets: Evidence from Automobiles (April 14, 2013). Available at SSRN: https://ssrn.com/abstract=2328204 or http://dx.doi.org/10.2139/ssrn.2328204

David Rapson (Contact Author)

University of California, Davis ( email )

One Shields Avenue
Apt 153
Davis, CA 95616
United States

Pasquale Schiraldi

London School of Economics & Political Science (LSE) - Department of Economics ( email )

Houghton Street
London, WC2A 2AE
United Kingdom

HOME PAGE: http://sites.google.com/view/schiraldi-pasquale/home

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