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THAT'S NEWS TO ME! INFORMATION REVELATION IN PROFESSIONAL CERTIFICATION MARKETS |
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| Authors: | GINGER ZHE JIN REW KATO JOHN A. LIST |
| Affiliation: | Jin:;Department of Economics, University of Maryland, College Park, MD 20742. Phone (301) 405-3484, Fax (301) 405-3542, E-mail Kato:;Office of Safety and Health Statistics, Bureau of Labor Statistics, Postal Square Building 3180, 2 Massachusetts Avenue, NE Washington, D.C. 20212. Phone (202) 691-6158, E-mail List:;Department of Economics, the University of Chicago, 1126 East 59th Street, Chicago, IL 60637. Phone (773) 702-9811, E-mail |
| Abstract: | Using sportscard grading as an example, we employ field experiments to investigate the informational role of professional certifiers. Empirical results suggest three patterns: first, the grading certification provided by the first professional certifier offers new information to inexperienced traders but adds little information to experienced dealers. This implies that the certification may reduce the information asymmetry between informed and uninformed parties. Second, compared with the incumbent, new entrants adopt more precise signals and use finer grading cutoffs to differentiate from the incumbent. Third, our measured differentiated grading cutoffs map consistently into prevailing market prices, suggesting that the market recognizes differences across multiple grading criteria. ( JEL D8, C93) |
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