Role of resource gap and value appropriation: effect of reputation gap on price premium in online auctions
Author: Obloj, Tomasz ; Capron, LaurenceINSEAD Area: Strategy Series: Working Paper ; 2010/26/ST Publisher: Fontainebleau : INSEAD, 2010.Language: EnglishDescription: 20 p.Type of document: INSEAD Working Paper Online Access: Click here Abstract: In this study, we draw on the resource-based view of the firm and on value-added methodology to examine when firms appropriate value from their superior resources. We argue for the need to take into account the role of the resource gap between competitors rather than the absolute resource stock of the focal firm when examining the resource-performance relationship. In particular, we investigate whether the ability of a reputable seller to command a price premium is influenced by the reputation gap (i.e., the reputation differences between the focal seller and its closest competitor standardised by the reputation stock of both sellers). We test our hypotheses on 72 matched pairs of online transactions screened from more than 2,000 auctions of new mobile phones on the Polish Internet auction site Allegro. We find that the ability of a reputable seller to command a price premium (1) increases with the size of the reputation gap between the focal seller and its matched competitor, and (2) becomes progressively smaller for each additional unit of the seller reputation gap.| Item type | Current location | Collection | Call number | Status | Date due | Barcode | Item holds |
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Digital Library | Available | BC009094 |
In this study, we draw on the resource-based view of the firm and on value-added methodology to examine when firms appropriate value from their superior resources. We argue for the need to take into account the role of the resource gap between competitors rather than the absolute resource stock of the focal firm when examining the resource-performance relationship. In particular, we investigate whether the ability of a reputable seller to command a price premium is influenced by the reputation gap (i.e., the reputation differences between the focal seller and its closest competitor standardised by the reputation stock of both sellers). We test our hypotheses on 72 matched pairs of online transactions screened from more than 2,000 auctions of new mobile phones on the Polish Internet auction site Allegro. We find that the ability of a reputable seller to command a price premium (1) increases with the size of the reputation gap between the focal seller and its matched competitor, and (2) becomes progressively smaller for each additional unit of the seller reputation gap.
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