The value of assurance service: an example from the market for baseball cards

Abstract

Purpose

The need for reliable information for decision makers is a fundamental principle underlying the demand for audit and assurance services. Yet, individuals and companies often do not understand the value that users place on independent third‐party assurance. This paper aims to address this issue.

Design/methodology/approach

This paper uses the market for baseball cards to provide an empirical analysis of the value users associate with third‐party assurance services. Paired observations for baseball cards are identified on eBay; one with a third‐party assurance regarding its quality and one with only the seller's statement.

Findings

Comparative analysis indicates that bidders are willing to pay significantly more for the items when third‐party assurance was provided.

Originality/value

These findings indicate that third‐party assurance is valued by consumers, and where information asymmetry exists between buyer and seller, sellers should consider the use of third‐party assurance to increase sale price.

Citation

Sinason, D.H., Webber, S.A. and Nikitkov, A. (2009), "The value of assurance service: an example from the market for baseball cards", Management Research News, Vol. 32 No. 12, pp. 1147-1162. https://doi.org/10.1108/01409170911006902