Question

In: Economics

**This is for an Economic Analysis of the company Amazon** What is the role of asymmetric...

**This is for an Economic Analysis of the company Amazon**

What is the role of asymmetric information experienced by Amazon?

Are there issues of adverse selection and/or moral hazard in Amazon?

Are incentives aligned between management and workers?

Solutions

Expert Solution

Asymmetric information plays a very important role in ebusiness . In E-business, sellers and buyers are doing buying and selling at distinct level.

Amazon face a problem of Adverse selection .

When buyers buy a product through online so buyers dont know about the quality of the product and and sellers dont know that buyers will like the product or not so both party have lack of information which leads to adverse selection.

Amazon has also experienced of moral hazard. When buyers buy a product .so after ordering the product ,he is reckless about the product and not very much concern about the product because he know that after getting the product ,if will return the product so he doesn't have to pay anything ,the deducted amount will have to pay Amazon'seller.

For example, a buyers have order 4 products but he only want 2 products out of 4 products . So after delivering the product ,he is reckless and he has fun to return the product because he know that after returning the product, he doesn't have to pay anything but seller's have to pay the returing cost. So his behaviour after getting product is reckless .


Related Solutions

**This is for an economic analysis of the company Amazon** What does the market for important...
**This is for an economic analysis of the company Amazon** What does the market for important inputs look like? Does Amazon have many or few options from which to source important inputs? Is the hold-up problem a concern? Are there economies of scale? Are there economies of scope or diseconomies of scope? Are there large fixed costs? How do the variable costs compare to the fixed costs in terms of relative size?
Are the concepts of Moral Hazard and Asymmetric Information useful for economic analysis?
Are the concepts of Moral Hazard and Asymmetric Information useful for economic analysis?
identify and explain the role of various types of economic indicators in the economic analysis.
identify and explain the role of various types of economic indicators in the economic analysis.
What is the appropriate role of economic analysis when dealing with issues that affect future generations?
What is the appropriate role of economic analysis when dealing with issues that affect future generations?
PEST Analysis for Amazon
PEST Analysis for Amazon
perform IFE Matrix and analysis of Amazon perform EFE Matrix and analysis of Amazon
perform IFE Matrix and analysis of Amazon perform EFE Matrix and analysis of Amazon
What role does information technology play in Walmart and Amazon?
What role does information technology play in Walmart and Amazon? How is it helping them refine their business strategies?
Economic growth Definition What factors cause economic growth? What is the role of productivity in economic...
Economic growth Definition What factors cause economic growth? What is the role of productivity in economic growth?   Determination of the full-employment quantity of labour in the labour market Understand the role of the full-employment quantity of labour in determining potential GDP and in economic growth.
What is the role of takeovers in corporate governance? How does asymmetric information between very knowledgeable...
What is the role of takeovers in corporate governance? How does asymmetric information between very knowledgeable corporate insiders and less knowledgeable, but rational, outside investors discourage raising equity through selling new shares to the public?
Positive economic analysis deals with_________________________ and normative economic analysis deals with_____________________ (a)What should be, what is...
Positive economic analysis deals with_________________________ and normative economic analysis deals with_____________________ (a)What should be, what is (b)What is, what ought to be (c)Fiction, fact (d)Positive things, negative things A leftward shift in the PPF curve of a country’s economy given ceteris paribus could be caused by: (a)An improvement in technology (b)A decrease in resources (c)An increase in entrepreneurship (d)All of the above
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT