Warranty and the Risk of Misinforming: Evaluation of the Degree of Acceptance

Abstract

Nowadays the product warranty plays increasingly important role in any business transaction. It is a valuable attribute of the product and it is used extensively in marketing and advertising. It is a tool to enforce the competing power of the producer on the market place. There is a vast literature on the product warranty related to the product malfunctioning. In this study we address another type of warranty - the warranty of misinforming, which of great importance in the light of indirect business communication, as in e-commerce. Here, we extend previous studies, aiming to provide a more realistic model for quantifying the risk of misinforming caused by information asymmetry. We propose an approach for evaluating the degree of acceptance of the product with respect to individual tasks, which previously was assumed to be a known constant.