Ebay Case Study Essay
As a global online auction market, eBay provides people a new way to do online shopping, not only by purchasing a product at a certain price, but also by the unique auction format. Through auction procedure, sellers can earn more than the base price in their mind and buyers can bid the price up to the most they can afford.
By setting up a convenient platform to gather sellers and buyers together, eBay reduces lots of searching costs as other websites expend. However, there are still two major problems which can lead to transaction costs for an unregulated online auction market: Adverse selection and moral hazard. Adverse selection occurs when information asymmetries appear before both sides …show more content…
EBay has a large, loyal customer base which ensures their quantity of products. Compare to other websites such as Amazon, eBay provides more various products for sale, range from cars, furnitures to toys and candies. Buyers can ﬁnd everything they want through this website and don’t need to go to different markets for different needs. On the other hand, eBay gives each individual and every small business a chance to sell things and build their own reputation. Also, eBay works with Microsoft’s to make it possible for consumers