Lorenzo Coviello, Uri Gneezy, Lorenz Götte, 18 February 2018

Measuring the returns to search engine marketing accurately is difficult, but one study suggested that if eBay were to suspend its branded search ads, the volume of traffic to the site would remain virtually unchanged. Based on a field test involving a website for automotive information in the US, this column argues that money spent on search engine marketing by smaller brands may be more effective than previously documented. Only about half of the traffic normally flowing through branded search ads still flowed to the site when it relied only on organic search links.

Andreas Lendle, Marcelo Olarreaga, Simon Schropp, Pierre-Louis Vézina, 04 September 2012

Geographic distance continues to encumber international trade despite advances in transportation and communication technologies. This column shows that eBay, an online market, reduces the effect of distance on trade by 65%, mainly by reducing information frictions. As consumers 'put their money where their mouse is', welfare gains are largest where they are most needed, i.e. in remote countries with bad institutions.

Marcelo Olarreaga, Andreas Lendle, Simon Schropp, Pierre-Louis Vézina, 19 August 2012

This paper compares the impact of distance, a standard proxy for trade costs, on eBay and offline international trade flows, finding that the effect of distance to be on average 65% smaller on the eBay online platform than offline, and that online markets can help overcome government and offline market failures.

Liran Einav, Theresa Kuchler, Jonathan Levin, Neel Sundaresan, 18 September 2011

The internet has reduced dramatically the cost of varying prices, displays, and information provided to consumers. This column discusses how this change enables both passive and active experimentation by retailers, and how this experimentation can be used by economic researchers in a way that takes advantage of the scale and heterogeneity of online markets.

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