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

David H. Sinason, Sally A. Webber, Alex Nikitkov
2009 Management Research News  
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 of independent third-party assurance. This paper uses the market for baseball cards to provide an empirical analysis of the value of assurance services. Paired observations for baseball cards were identified on eBay; one with a third-party assurance regarding its quality and one with only the
more » ... e with only the seller's statement. Comparative analysis indicates that bidders were willing to pay significantly more for the items when third-party assurance was provided. Another, still broader option would be to define assurance services as services that reduce information risk for economic decision makers. Information risk is the risk that decisions are wrong because of defects in the information used, e.g., information that is wrong (unreliable), too late, unsuited for the decision to be made (irrelevant) or incomplete (Elliot 1994, p. 120).
doi:10.1108/01409170911006902 fatcat:4xsopf5ggzdk5l7aweixqgocai