Economics Webinar - Game Changers: Evidence from Tesla Model 3 Unveiling Announcement

On 31 March 2016, a newly designed Tesla electric sedan – Model 3, which targeted massvehicle markets in the U.S, was unveiled. As “a game changer,” the arrival of Model 3 significantly affected the sedan and hatchback cars rather than cars with other body types. Using eBay car auction data, we exploit this event to examine how and at what extent buyers adjust their willingness to pay for existing cars at the individual transaction level. Our difference-indifferences analysis finds robust evidence of a decrease in the final bid prices, approximately 6.5 percent, of the sedan and hatchback car auctions.