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  • Open Daily: 10am - 10pm
    Alley-side Pickup: 10am - 7pm

    3038 Hennepin Ave Minneapolis, MN
    612-822-4611

Open Daily: 10am - 10pm | Alley-side Pickup: 10am - 7pm
3038 Hennepin Ave Minneapolis, MN
612-822-4611
The Cost of Quality Uncertainty: Empirical Insights into 'The Market for Lemons'

The Cost of Quality Uncertainty: Empirical Insights into 'The Market for Lemons'

Samwer, Johannes

Paperback

Business GeneralManagement

ISBN10: 3640539745
ISBN13: 9783640539741
Publisher: Grin Verlag
Published: Feb 18 2010
Pages: 76
Weight: 0.24
Height: 0.18 Width: 5.83 Depth: 8.27
Language: English
Diploma Thesis from the year 2006 in the subject Business economics - Company formation, Business Plans, grade: 1,7, University of Münster (Unternehmensgründung und -entwicklung), language: English, abstract: This paper relates price with quality uncertainty, proving its persistence in the market for used cars in Germany. Based on 1,712 online car offers, grouped in four different segments, we test three hypotheses regarding the cost of quality uncertainty. A significant price difference between private and professional sellers is statistically confirmed. This price difference remains statistically significant even if private sellers' prices are adjusted in terms of assuring the same quality as professional sellers. The impact of quality signals is thereby found to be positive, but insufficient to counter quality uncertainty. The evidence suggests that quantifying the cost of quality uncertainty depends largely, but not solely, on the price of the good.

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