Search and Information Frictions on Global E-Commerce Platforms: Evidence from AliExpress

Jie Bai, Maggie Chen, Jin Liu, Xiaosheng Mu and Daniel Xu
Additional contact information
Jie Bai: Harvard Kennedy School
Jin Liu: New York University
Xiaosheng Mu: Princeton University
Daniel Xu: Duke University

Working Papers from Princeton University. Economics Department.

Abstract: We study how search and information frictions shape market dynamics in global e-commerce. Observational data and self-collected quality measures from AliExpress establish the existence of search and information frictions. A randomized experiment that offers new exporters exogenous demand and information shocks demonstrates the potential role of sales accumulation in enhancing seller visibility and overcoming these demand frictions. However, we show theoretically and quantitatively that this demand-reinforcement mechanism is undermined by the large number of online exporters. Our structural model rationalizes the experimental findings and quantifies efficiency gains from reducing the number of inactive sellers.

Keywords: global e-commerce; exporter dynamics; product quality; information frictions; search frictions (search for similar items in EconPapers)
JEL-codes: F14 L11 O12 (search for similar items in EconPapers)
Date: 2021-09
New Economics Papers: this item is included in nep-exp, nep-ict, nep-int, nep-pay and nep-reg
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Related works:
Working Paper: Search and Information Frictions on Global E-Commerce Platforms: Evidence from AliExpress (2020)
Working Paper: Search and Information Frictions on Global E-Commerce Platforms: Evidence from Aliexpress (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:pri:econom:2021-11

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