Analysis on Adverse Selection in the C2C Electronic Commerce Model

Abstract:

“Adverse selection” has abundant meanings in economic, one of its meanings is the phenomenon that the average quality of trading products in market is declining as well as quality goods are expelled by inferior goods for information asymmetry of both parties and the declining prices.In recent years, a new place of virtual goods, Internet market, is rapidly expanding. It has incomparable advantages in the transmission, acquisition and communication of information than traditional media in internet market. It will bring high efficiency to commercial activities definitely. However, the adverse selection and moral hazard, especially the adverse selection, raised by information asymmetry, will have the consequence-the market for lemon. And it will affect the market efficiency further. As a new transaction means, electronic commerce should solve kinds of problems by information asymmetry. In this way, it may help in promoting and facilitating of economic development.

• Periodical: Applied Mechanics and Materials (Volumes 644-650)
• Pages: 5477-5480
• DOI: https://doi.org/10.4028/www.scientific.net/AMM.644-650.5477
• Online since: September 2014
• Authors: Na Na Zhang*, Qing Tian Deng
• Keywords: Adverse Selection, C2C Model, E-Commerce, Information Asymmetry

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