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Please use this identifier to cite or link to this item:
http://hdl.handle.net/2451/28517
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| Title: | The Impact of Online Information on the Purchase of Certified Used Cars |
| Authors: | Ramachandran, Vandana - Smith School of Business, University of Maryland
Viswanathan, Siva - Smith School of Business, University of Maryland
Gosain, Sanjay - Smith School of Business, University of Maryland |
| Keywords: | certification, online information, quality signals, uncertainty
reduction, used cars |
| Issue Date: | 2007 |
| Series/Report no.: | NET Institute Working Paper;07-37 |
| Abstract: | Secondary markets have adopted a number of quality signaling mechanisms
such as certification to reduce information asymmetries between buyers
and sellers in these markets. However the importance and value of these
signals depends on the nature and extent of information asymmetries.
With the growth of the Internet, consumers seeking to purchase used
goods now have access to a plethora of information on various aspects of
their purchase process. What then is the impact of such information on
the salience and value of a traditional quality signal such as
certification? We draw upon a unique and extensive dataset of consumers
who obtained vehicle and transaction related information from online
sources in their used vehicle purchase process to examine the impact of
their information-acquisition on the choice of certification, as well as
the price paid. We compare the outcomes of sales where consumers
purchased certified used cars with sales of used-cars where there was no
certification. Our findings highlight that product-related information
substitutes, and price-related information complements, certification as
indicated by their differential impacts on demand and price of certified
used cars. We discuss the relevance of our findings for buyers and
sellers and outline implications for online information providers as well. |
| URI: | http://hdl.handle.net/2451/28517 |
| Appears in Collections: | NET Institute Working Papers Series
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