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Published Articles >> Table of Contents >> Abstract
Proceedings of the 38th Annual Hawaii International Conference on System Sciences (HICSS'05) - Track 8
p. 211c
Welfare Implications of Secondary Electronic Markets
Anindya Ghose, New York University
Rahul Telang, Carnegie Mellon University
Ramayya Krishnan, Carnegie Mellon University
Full Article Text:
 
DOI Bookmark: http://doi.ieeecomputersociety.org/10.1109/HICSS.2005.686
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| Abstract |
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We develop a game-theoretical framework to investigate the competitive implications of
Consumer-to-Consumer electronic marketplaces, which promote concurrent selling of new and
used goods. In many e-marketplaces, where suppliers cannot directly use second-hand goods
for practicing inter-temporal price discrimination, the threat of cannibalization of new goods by
used goods become significant. We examine conditions under when it is optimal for suppliers
to operate in such markets, explaining why used goods markets may not be detrimental for them. While a monopolist supplier is worse off in the presence of a secondary market, competition can in fact make it better off. The presence of used good markets provides an active outlet for some consumers to sell their second-hand goods. This leads to two countervailing effects and the net result for suppliers is contingent upon different parameters. Overall, for a wide range of parameters, there is an increase in social welfare from establishing such secondary markets.
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 Additional Information
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Citation:
Anindya Ghose, Rahul Telang, Ramayya Krishnan,
"Welfare Implications of Secondary Electronic Markets,"
hicss,
p. 211c,
Proceedings of the 38th Annual Hawaii International Conference on System Sciences (HICSS'05) - Track 8,
2005
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