Online Trading and Adverse Selection in Smartphone Market
Online Trading and Adverse Selection in Smartphone Market
Author(s): Fulgence Dominick WaryobaSubject(s): Business Economy / Management, Marketing / Advertising, ICT Information and Communications Technologies
Published by: Editura Universitară & ADI Publication
Keywords: Information asymmetry; adverse selection; signaling;
Summary/Abstract: Information asymmetry that dominates almost all market operations deters market performance and in some markets may lead into non-existence of market due to adverse selection problem. This paper hypothesizes that online trading reduces adverse selection problem in Smartphone market. The findings show that high quality Smart phones sell more than low quality Smart phones. Therefore, trading online induces signaling which reduces the problem of information asymmetry thereby offsetting adverse selection problem.
Journal: Academic Journal of Economic Studies
- Issue Year: 4/2018
- Issue No: 4
- Page Range: 96-101
- Page Count: 6
- Language: English