Pigs in Cyberspace: A Natural Experiment Testing Differences between Online and Offline Club‐Pig Auctions

Abstract

We find sale prices and net revenues received by sellers in the Midwestern club-pig market are higher at traditional face-to-face auctions than at comparable Internet auctions. The comparison overcomes adverse selection issues that commonly plague such analyses by using data from sellers that allocated pigs to both markets based solely on exogenous differences in dates between online and offline auctions. Furthermore, both auctions feature ascending price formats with "soft-endings" and remaining quality variation is controlled by using detailed information on animal, seller and event characteristics. The results suggest that the higher prices and net revenues from traditional auctions are attributable to remaining differences in auction format and buyer pools. Furthermore, sellers may be willing to forgo higher revenues to capture the convenience and flexibility provided by Internet auctions, to reach buyers in other regions that face different seasonality in demand and to stimulate demand for privately negotiated sales.

The role and potential of information technology in agricultural improvement

“…In these issues, two papers treat accounting (Zoranović, Vukoje, 2008) and statistical (Odeh et al, 2010) software that can be used in agriculture and two papers (Roe et al, 2011;Diekmann et al, 2008) analyze use of internet auctions in trade of agricultural inputs and outputs. On the other hand, there are IT journals dealing with IT influence on economy and society that also treat IT support to agriculture.…”