TMP 120 Lecture Notes - Lecture 5: Zillow, Mobile App, Information Asymmetry
Document Summary
High-tech environment: market uncertainty - technological uncertainty - competitive. Volatility marketing of high-tech products & innovations. Game theory: definition: study of human interaction & cooperation in a dynamic competitive situation. Identifies the players: benefit: allows us to model competitive interaction, frames strategic decisions, specifies their options & any rules or constraints, assesses potential opportunities for conflicts & cooperation, considers sequencing of decisions, predicts outcomes of competitive situations. Zillow case: zillow set out to disrupt the industry by solving problems: Empower users to access real-time housing data: information asymmetry: sellers know more their home than potential buyers. Final sales price are based on incomplete information (hidden problems) Eliminate the need for realtors: principal-agent problem: agents had different incentives from buyers and sellers. Therefore, they might not negotiate the best deal for their clients: listing agents had costs (hosting open houses, client tours, advertising) and wanted to recoup them.
