http://scholar.harvard.edu/files/lewis/files/aer2e1012e42e1535.pdf
Read the paper Asymmetric Information, Adverse Selection and Online Disclosure: The Case of eBay Motors available in the Learning Materials folder (scroll down to the bottom). Respond to the following questions:
a. When you, as a consumer, buy used goods online (or think about buying online) are you sure that the purchased item will have the quality advertised by the seller? Explain.
b. How does eBay create value? Explain.
c. What potential contracting problems exist on eBay and how does eBay address these problems?
d. What is the main principle-agent problem that occurs in used goods online markets that the paper is referring to? Describe the problem in detail.
e. What is the main theory (or hypothesis) that the author proposes which helps buyers and sellers transact online?
f. How does the author make sure that the differences in observed transaction prices are due to differences in the quality of the cars sold? Explain.
http://scholar.harvard.edu/files/lewis/files/aer2e1012e42e1535.pdf
Read the paper Asymmetric Information, Adverse Selection and Online Disclosure: The Case of eBay Motors available in the Learning Materials folder (scroll down to the bottom). Respond to the following questions:
a. When you, as a consumer, buy used goods online (or think about buying online) are you sure that the purchased item will have the quality advertised by the seller? Explain.
b. How does eBay create value? Explain.
c. What potential contracting problems exist on eBay and how does eBay address these problems?
d. What is the main principle-agent problem that occurs in used goods online markets that the paper is referring to? Describe the problem in detail.
e. What is the main theory (or hypothesis) that the author proposes which helps buyers and sellers transact online?
f. How does the author make sure that the differences in observed transaction prices are due to differences in the quality of the cars sold? Explain.
