Selling Money on Ebay: A Field Study of Surplus Division

Abstract

Abstract We study the division of trade surplus in a natural field experiment on German eBay. Acting as a seller, we offer Amazon gift cards with face values between 5 and 500 Euro. eBay users, the subjects of our experiment, make price offers according to the Buy-it-Now or Best Offer trading protocol. Using a novel decomposition method, we infer the trade surplus from the data and find that on average the buyers offer one quarter of the surplus to the seller. Additionally, we document: (i) insignificant effects of stake size; (ii) poor use of strategically relevant public information; and (iii) differences between East and West German subjects.