Pricing Quality Attributes of Internet Domain Names: A Hedonic Model for Words

We investigate price finding of buyers and sellers of Internet domains. We develop a hedonic model for domain prices, controlling for differences in domain quality along multiple dimensions and test the model empirically on a large dataset of domain transactions observed at secondary domain markets. We document differences in the implicit prices for selected domain attributes across different types of buyers: domain developers, who subsequently launch websites on the purchased domains, price differently from domain investors. We find no evidence of sellers being able to discriminate between the different buyer types.