Physical and Electronic Wholesale Markets: An Empirical Analysis of Product Sorting and Market Function
比较二手车批发中的实体市场与离散电子市场，发现买家卖家根据逆向选择风险分配交易，实体市场作为一般交易所，电子市场作为低风险车辆的现货市场。
Markets can yield significant economic benefits by improving transaction efficiency, but effective design is necessary to achieve these benefits. We compare a physical market to a discrete electronic market in the wholesale used vehicle industry to evaluate how their different designs work for different types of transactions. We find that buyers and sellers balance adverse selection costs and other transaction costs when using the two markets, with the physical market serving as the general exchange and the electronic market serving as a spot market for vehicles with low adverse selection risk. These findings increase our understanding of how sellers and buyers distribute supply and demand between physical and electronic markets in industries in which they coexist. They also increase our understanding of how information technology can improve market function in wholesale environments.