Selling “Money” on eBay: A field study of surplus division

• Published in: Journal of economic behavior & organization Vol. 181; pp. 19 - 38
• Main Authors: Gizatulina, Alia, Gorelkina, Olga
• Format: Journal Article
• Language: English
• Published: Elsevier B.V 01.01.2021
• Subjects: Bargaining; eBay; Field experiment; Online trade; Surplus division; Ultimatum game; C57; Bargaining; Ultimatum game; Surplus division; Online trade; eBay; C93; Field experiment; C72
• ISSN: 0167-2681; 1879-1751
• DOI: 10.1016/j.jebo.2020.11.029

•We conduct a natural field experiment on eBay.de.•Amazon gift cards of different nominal values are offered via ”Buy-it-Now or Best-Offer” format.•Buyers’ behaviour is insensitive to the size of stakes or public information.•We use a novel statistical approach to recover the information about intentions of buyers when they make their initial offer for a gift card.•The observed distribution of offers is decomposable into two underlying distributions - a distribution of shares of surplus offered by buyers to the sellers and a distribution of buyers’ beliefs about sellers’ outside options.•The experimental data is consistent with the buyers offering one quarter of the trade surplus to the seller on average. 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 between 5 and 500 Euro. eBay users, the subjects of our experiment, make price offers according to the Buy-it-Now or Best Offer trading protocol. Using a novel decomposition method, we infer the trade surplus from the data and find that on average the buyers offer one quarter of the surplus to the seller. 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.