The "Lemons" Problem in C2C Markets
نویسنده
چکیده
Asymmetric information and adverse selection widely exist in used product markets. However, current C2C markets have two significant features: dynamic online evaluation system and “smarter” buyers (defined as customers with more prior information). In our primary analysis on the first feature, we find that higher quality used items are available in C2C markets and the size of the markets becomes larger. This suggests that the “lemons” problem is alleviated in current C2C markets. Further research about the impact of “smarter” buyers on C2C markets and empirical testing on the “lemons” problem in C2C markets are underway.
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