EBay Case Study Example | Topics and Well Written Essays - 1000 words

EBay - Case Study ExampleUnlike in the marketplace, eBay provides a market space which is not constrained by while and distance. Through the internet technology buyers and vendors from all over the world meet virtually in severalize to trade their products with each other.In order to ensure the gumshoe and convenience of the participants in each auction that the company hosts, the company has in addition designed value-added features and service which adds to the value that the customer receives. Thus, aside from bringing buyer and seller together, eBay also delivers safety to customers by ensuring commodious, fast, and safe online transactions.Alongside the huge advantages of transacting online are the risks shouldered by the participants and challenges for eBay. The hesitance of individuals to trade their products and services through online portals, stems from the fact that unlike in the marketplace, that there is a huge information asymmetry in marketspace both on the beli evability of the participants and the quality of the products which are traded. Thus, numerous espial problems occur including shipped products which are unpaid, goods which do not meet the expectations of the buyer, joy bidders, and fraud. These contracting problems are typical in the nature of eBays business. Since each of the participant in the market wants to maximize his utility by buying unique goods at the same time paying the least for the products which he thinks have higher value while the seller wants to get the better(p) possible money from his commodities, both could have the intention of outdoing each other because of information asymmetry. 3. How does eBay address these problems aside from bringing buyers and sellers together, eBay also enhanced its portal with value-added services and features which eliminate fear and assures each participant of safe, reliable, and snug transaction. As mentioned in the case, Feedback forum is available for everyone who would like to have a thorough understanding of the credibility of a participant. In order to ensure that buyers are getting their moneys worth, each buyer or seller is also provided with insurance. The company also established SafeHarbor to identify, investigate, and take corrective actions on fraud and other vilification of the companys services. eBays partnership with i-Escrow provides security to payment made. All of these value added features enhances the value delivered to the companys services. 4. What are the contracting costs of eBayThe contracting problems identified above that eBay wants to eliminate pressures the business organization to shell out financial resources in order to provide solutions. As discussed in the previous paragraphs, eBay has been keen in identifying the contracting problems in its system and is move in eliminating these in order to ensure the satisfaction of auction participants. However, in so doing, it also demand to make particular investments which requi re financial resources. All of these efforts stems from the companys aim of making trading safe and convenient to virtual buyers and sellers. In order to