Research Project

The Co-Evolution of Income and Product Sales Distributions on eBay

Professor Erik Brynjolfsson and Sagit Bar-Gill

Online markets for a large variety of goods have been shown to exhibit long tail properties, with significant aggregate sales of niche products. Mathematically, this translates into sales distributions that follow power laws. Power laws have also been documented in firm-size and personal income distributions, but a study of both income and product sales distributions and their dynamics in a single marketplace has yet to be carried out.  EBay is the ultimate online marketplace, with annual net revenue of over $15 billion, a population of nearly 150 million active buyers, and over one million sellers who make their living on eBay. In the proposed project we plan to explore eBay’s long tail, in both product sales and seller income distributions, and their co-evolution over time. We will then explore possible drivers of the trends observed, and of individual mobility within the income distribution. The study of eBay’s income distribution will thus provide meaningful insights on economy-wide trends.