MONEY AND PRODUCT QUALITY UNDER ASYMMETRIC INFORMATION

2017 ◽  
Vol 55 (3) ◽  
pp. 1388-1399
Author(s):  
Tao Peng
Keyword(s):  
Asymmetric Information ◽  
Product Quality

scholarly journals Selling with evidence

2019 ◽  
Vol 14 (2) ◽  
pp. 345-371
Author(s):  
Frédéric Koessler ◽  
Vasiliki Skreta
Keyword(s):  
Asymmetric Information ◽  
Product Quality ◽  
Optimal Allocation ◽  
Pareto Optimal ◽  
Principal Problem ◽  
Equilibrium Allocation ◽  
Interdependent Values ◽  
Ex Ante ◽  
Private Value ◽  
Posted Price

We study the informed‐principal problem in a bilateral asymmetric information trading setting with interdependent values and quasi‐linear utilities. The informed seller proposes a mechanism and voluntarily certifies information about the good's characteristics. When the set of certifiable statements is sufficiently rich, we show that there is an ex ante profit‐maximizing selling procedure that is an equilibrium of the mechanism proposal game. In contrast to posted price settings, the allocation obtained when product characteristics are commonly known (the unravelling outcome) may not be an equilibrium allocation, even when all buyer types agree on the ranking of product quality. Our analysis relies on the concept of strong Pareto optimal allocation, which was originally introduced by Maskin and Tirole (1990) in private value environments.

scholarly journals On the market for “Lemons”: quality provision in markets with asymmetric information

2020 ◽  
Vol 7 (1) ◽  
Author(s):  
Konstantinos Giannakas ◽  
Murray Fulton
Keyword(s):  
Asymmetric Information ◽  
Product Quality ◽  
Market For Lemons ◽  
Economic Result ◽  
Quality Product ◽  
Quality Provision

AbstractAkerlof’s “Lemons” paper provides a seminal economic result suggesting that, in markets with asymmetric information where product quality is unobservable by consumers prior to purchase and use, the introduction of a low-quality product will drive its higher quality counterpart(s) out of the market. In this paper we identify some empirically relevant cases/conditions under which the introduction of a low-quality product does not drive its higher quality substitutes out of the market but, instead, ends-up coexisting with them.

scholarly journals Merchant or Two-Sided Platform?

2007 ◽  
Vol 6 (2) ◽  
Author(s):  
Andrei Hagiu
Keyword(s):  
Asymmetric Information ◽  
Product Quality ◽  
Investment Incentives ◽  
First Pass

This paper provides a first pass at comparing two polar strategies for market intermediation: "merchant" mode – buying from sellers and reselling to buyers - and "two-sided platform" mode – enabling affiliated sellers to sell directly to affiliated buyers. The merchant mode is more profitable when the chicken-and-egg problem for the two-sided platform is more severe and when the degree of complementarity among sellers' products is higher. The platform mode is preferred when seller investment incentives are important or when there is asymmetric information regarding seller product quality. We discuss these tradeoffs in the context of several prominent digital intermediaries.

The Study on the Quality Management of Supply Chain Production in Operations

2011 ◽  
Vol 267 ◽  
pp. 265-270
Author(s):  
Li Na Wang
Keyword(s):  
Quality Control ◽  
Supply Chain ◽  
Quality Management ◽  
Asymmetric Information ◽  
Supply Chains ◽  
Product Quality ◽  
Principal Agent ◽  
Agent Model ◽  
Numerical Example ◽  
Principal Agent Model

Based on the different effort levels of product quality management of the suppliers, this paper has established the principal-agent model under the asymmetric information. At the same time, it has also studied the coordination quality control in supply chains and the optimal revenue problem of the supply chain. Finally, the model has been carried out the numerical example analysis.

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