Considering a used car market seller 10,000 2000 buyer 12,000 1000 A Good Car A lemon 1. Under perfect information ( buyer and seller both know the true condition and value of the car ) What is the expected profit for a good car seller if he successfully sold one car? What is the expected profit for a lemon seller? 2. Under asymmetric information ( buyer only knows their own evaluation for the car, and there are 50% chance for them to end up with a lemon ) What is the reservation price for the buyer? What is the expected profit for a good car seller if he successfully sold one car? What is the expected profit for a lemon seller? 3. Under asymmetric information, what will eventually happen to this used car market?
Considering a used car market seller 10,000 2000 buyer 12,000 1000 A Good Car A lemon 1. Under perfect information ( buyer and seller both know the true condition and value of the car ) What is the expected profit for a good car seller if he successfully sold one car? What is the expected profit for a lemon seller? 2. Under asymmetric information ( buyer only knows their own evaluation for the car, and there are 50% chance for them to end up with a lemon ) What is the reservation price for the buyer? What is the expected profit for a good car seller if he successfully sold one car? What is the expected profit for a lemon seller? 3. Under asymmetric information, what will eventually happen to this used car market?
Principles Of Marketing
17th Edition
ISBN:9780134492513
Author:Kotler, Philip, Armstrong, Gary (gary M.)
Publisher:Kotler, Philip, Armstrong, Gary (gary M.)
Chapter1: Marketing: Creating Customer Value And Engagement
Section: Chapter Questions
Problem 1.1DQ
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