ON THE IMPLICATIONS OF NEW POLICIES, MARQUEE SELLERS, AND GREEN NUDGES IN ONLINE SECONDARY MARKETS FOR DURABLE IT PRODUCTS: EVIDENCE FROM EMPIRICAL STUDIES

Abstract

The rapid pace of product development in the IT sector has led to a volume surge of product returns, giving rise to critical environmental threats that can potentially have significantly adverse ecological effects. One possible avenue to mitigate these negative effects pertains to the establishment of robust secondary markets for these products, so that their useful life can be enhanced. My dissertation seeks to study multiple aspects aimed at enhancing the efficiency of online secondary markets for durable IT products, using economic and behavioral theories. The first essay examines the extent to which firm policies in the primary market mitigate inefficiencies caused by adverse selection in the secondary market for IT products. I find that policies implemented by firms in the primary market with respect to their products can have beneficial effects in addressing adverse selection in the secondary markets. The second essay studies how adding a marquee seller to a B2B secondary market platform for IT products affects other sellers, in terms of the prices they obtain for comparable products. I show that the entry of a marquee seller has a positive effect on the prices obtained by other sellers on the platform. I further show that this positive effect on final prices is moderated by bidders multi-homing activity, and their level of involvement in the marquee seller’s site. Finally, through behavioral experiments performed on Amazon MTurk, my third essay examines the extent to which the use of behavioral interventions, in the form of green nudges, can enhance the propensity of used IT products being purchased in the secondary market, thereby increasing the lifetime of these products. I find that the efficacy of using green nudges to impact consumer behavior depends on the kind of motivation (i.e., internal versus external motivation) the nudge is delivering. I further find that the effectiveness of green nudges can vary based upon product price and perceived quality, and consumer demographics and latent personalities. Collectively, the findings from these studies in my dissertation provide valuable theoretical as well as practical insights about the effectiveness of different mechanisms for enhancing the efficiency of online secondary markets for durable IT products.