A conclusion of the asymmetric information tennis racquet eBay transaction case study developed in class was that: a. a separating equilibrium could be restored with some of the tools that eBay uses, including money-back warranties and ratings defining the reputation of sellers. b. a separating equilibrium will likely take place, but with prices much higher than in markets that are an alternative to eBay. c. all racquets are likely to be fake. d. a pooling equilibrium could be restored with some of the tools that eBay uses, including money-back warranties and ratings defining the reputation of sellers.
A conclusion of the asymmetric information tennis racquet eBay transaction case study developed in class was that: a. a separating equilibrium could be restored with some of the tools that eBay uses, including money-back warranties and ratings defining the reputation of sellers. b. a separating equilibrium will likely take place, but with prices much higher than in markets that are an alternative to eBay. c. all racquets are likely to be fake. d. a pooling equilibrium could be restored with some of the tools that eBay uses, including money-back warranties and ratings defining the reputation of sellers.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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8. Economics
A conclusion of the asymmetric information tennis racquet eBay transaction case study developed in class was that:
a. a separating equilibrium could be restored with some of the tools that eBay uses, including money-back warranties and ratings defining the reputation of sellers.
b. a separating equilibrium will likely take place, but with prices much higher than in markets that are an alternative to eBay.
c. all racquets are likely to be fake.
d. a pooling equilibrium could be restored with some of the tools that eBay uses, including money-back warranties and ratings defining the reputation of sellers.
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