Lemons Problem Research Articles

Redesain UI UX Website Lemonder Indonesia Menggunakan Metode Design Thinking Untuk Meningkatkan Media Promosi

Lemonder Indonesia's website is designed to compete in the market for lemons, vegetables, and other high-quality fresh products. This website provides easy access to information about the company and its products for all users. The purpose of this research is to increase customer trust and improve the design of the Lemonder Indonesia website. The Design Thinking approach is used as a method for redesigning the website. This method includes five stages: Empathy, Define, Ideate, Prototype, and Testing. It focuses on consumer-centered innovation, emphasizing product and service designs that attract attention in the business world. During the testing phase, this research uses usability testing to evaluate the effectiveness of the website redesign. The System Usability Scale (SUS) involves using a questionnaire distributed via Google Forms. Before the redesign, the SUS score was 51.75%, which is a grade D with a "poor" indicator. However, after the redesign, the SUS score significantly increased to 85.08%, which is a grade A with an "excellent" indicator. This result demonstrates that the SUS testing in this research was successful and that the new design is well-received by users.

Addressing the Lemons Problem in Environmental Sustainability:Greenwashing and E-Waste Challenges in African Markets

The "lemons problem," as conceptualized by Akerlof in 1970, depicts the adverse effects of information asymmetry in markets wherein sellers are more informed than buyers, consequently causing the leakage of low-quality commodities. This paper explains how this phenomenon plays out in an environmental sense more specifically, through the disguise of greenwashing and e-waste overflowing into African nations. False claims of sustainability by company’s dupe customers and lead to environmental degradation. The agriculture and energysectors are put under the scanner, showing the damage done by monoculture practices and the fraudulent promotion of genetically modified organisms. The importation of electronic waste and used vehicles into Africa serves to underscore the serious health and environmental implications of such exploitation. To answer this, there is the need to first introduce the EPR model where the responsibility of dealing with waste management will be passed to the producers who will be forced to be responsible and sustainable.

The dark side of AI in professional services

ABSTRACT The introduction and widespread adoption of Artificial Intelligence in the professions has the potential to deliver a number of critical public goods, such as widening access to justice and healthcare through AI-powered professional services. Yet, the deployment of AI in the professions does not come without challenges, exemplified by the concerns about explainability, privacy, and human agency. In this paper, we explore how these issues may give rise to dark sides of AI in professional services and illustrate how an uncoordinated process of adoption and deployment can threaten the scope of AI-powered services. In particular, we illustrate how the adoption and deployment of AI in services may undermine the fiduciary duty between clients and professionals that, so far, has safeguarded the relationship between them, creating a ‘market for lemons’ of professional services. We conclude with a reflection on plausible ways forward to facilitate and smooth the transition to AI-powered services.

The Impact of Feedback under Information Asymmetry on Market Dynamics: Results from a Classroom Experiment

This paper focuses on the problem of so-called "lemon markets", first described by George Akerlof, where information asymmetry about product quality leads to dysfunctional outcomes such as poor average product quality and relatively low levels of trade, resulting in a loss of collective wellbeing. In the age of online commerce, the problem is especially relevant, given that consumers buy many more products without relying on personal experience than at any time in the past. Possible solutions to the problem suggested in the literature are reputation building on the part of producers and improving the information available to consumers, e.g., by way of publicly accessible consumer reviews (even though these can be gamed or faked by sellers). The paper presents the results from a classroom experiment that simulated a "lemon market". The advantage of using a classroom experiment is that while the market is recreated along a small number of rules and incentives, in line with neat economic models, the participants are real, living decisionmakers, displaying the deviations of actual human behaviour from that of a hypothetical "rational actor". In all, 294 students majoring in business information technology participated, making up 11 simulated markets. The results presented focus mainly on the supply side, namely, the quantities and prices of goods offered, and nine supply curves are estimated (for three quality grades of goods in three phases of the game). The research concludes that under perfect information, the market performs efficiently. In the condition where only sellers but not buyers have information about product quality, the volume of trade declines, although not as drastically as previous findings have suggested, and the market shows signs of recovery, albeit at a suboptimal equilibrium. After the option of consumer feedback is introduced, the market shows further convergence toward the socially optimal state. The results reaffirm that consumer feedback plays an important role in filling the information gap when product quality is uncertain; however, it is not sufficient in itself to overcome the "lemon market" problem. Other important influences on consumer behaviour under uncertainty are suggested, such as risk-taking, changing attitudes towards the act of (online) purchases, and cultural factors.

Mandatory vs. Voluntary Disclosure in the Dynamic Market for Lemons

Mandatory vs. Voluntary Disclosure in the Dynamic Market for Lemons

Bringing Rational Inattention to the Market for Lemons

Bringing Rational Inattention to the Market for Lemons

The lemon market of insolvency proceedings in Spain in the new normal: Information, asymmetry, and adverse selection problems

The lemon market of insolvency proceedings in Spain in the new normal: Information, asymmetry, and adverse selection problems

Game Analysis on Supervision of live goods problem with Tiktok Platform Participation including the absence of Lemon market

With the internet and technology development, the utilization rate of short video platforms has gradually increased, and online shopping has become very common. On September 20, 2016, Tiktok short video platform was launched. A TikTok mall is a delivery tool provided by Tiktok e-commerce for merchants. The platform reduces the threshold for merchants to meet the requirements and implements a comprehensive opening policy to obtain more user traffic. Inevitably, lowering the threshold brings the disadvantage of merchants selling fake and inferior products, leading to the lemon for the market and significantly impacting the platform atmosphere and user traffic. Based on the idea of mixed strategy and a journal about the online game theory of product quality, this paper adds more variables, taking into account the negative impact of Tiktok's actual scheme policy and lemon market. Constructing a game theory model including merchants and Tiktok regulatory department, analyze its nash equilibrium and derivative of each variable. Finally, find out that the lemon market exists on the Tiktok platform. Second, the higher cost of high-quality firms leads to strengthening supervision to prevent the low-quality firms from being driven out of the market. Third, the lower profit of low-quality goods, the merchants prefer to sell high-quality goods. The strategies selected by the regulatory authorities on the Tiktok platform and the strategies of the merchants are influenced by the production costs of different quality, the regulatory costs, and the rewards obtained from the efforts made by the regulatory authorities in sampling inspection. These factors will also influence their profits. This paper will prove the conclusion with accurate data.

How does platform certification affect the marketing performance of sellers in food e-commerce? Interaction with reputation mechanisms

PurposePlatform certification constitutes an effective mechanism for managing the lemon problem concerning food e-commerce. This work aims to evaluate the market effect of platform certification and analyzes its correction mechanism for lemon problem combined with reputation mechanism.Design/methodology/approachUtilizing the Gold Seller certification of Taobao.com to serve as an illustration, the authors conducted an empirical study based on the sales data of hairy crabs among 2,239 sample sites over six points in time from October to December 2019, systematically examining the market effect of food e-commerce platform certification along with the interaction between food e-commerce platform certification and reputation mechanisms, followed by a heterogeneity test by product price.FindingsThis study finds that sellers with platform certification can significantly increase their sales. The market effect of platform certification is more easily observed in the low-price product market. In addition, platform certification and reputation mechanisms have complementary effects. In a low-price product market, the complementary effect of platform certification and product reputation diminishes, while the complementary effect of platform certification and seller reputation disappears.Originality/valueThis study explores the market effect of food e-commerce platform certification, reveals the market effect of certification mechanism when multiple signaling mechanisms exist simultaneously and conducts an empirical test based on real market data. It provides a better comprehension of how platform certifications work in food e-commerce.

Examining spatial market efficiency under different marketing regulations: The case of Turkish lemon markets

AbstractThis study evaluates spatial market and storage efficiency in Turkish lemon markets using switching regime (SR) and threshold autoregression models. Our sample period includes a crucial regulatory reform aimed at improving the performance of fresh fruit and vegetable markets, shortening the production‐consumption chain, and reducing retail prices. Using an extended SR model that allows for a gradual transition from the old to the new marketing regime, we test the hypothesis of no structural change in market efficiency and transaction costs in regional markets, including major consumption regions Istanbul, Ankara, and Izmir. Results indicate that the probability of efficient arbitrage regime is relatively higher in the post‐reform period, albeit there is still room for improvement. Extended SR models show no significant change in average transaction costs, while threshold autoregression models suggest a slight increase. Furthermore, spatial prices adjust more quickly in the post‐reform period, supporting relatively more efficient market functioning. While the regional markets seem to function more efficiently following the marketing reform, it has not led to permanent reductions in retail prices. Finally, our results from storage threshold autoregression models suggest that markets function reasonably efficiently, with no remarkable difference in storage behavior between the pre‐reform and post‐reform periods.

When Art Becomes a Lemon: The Economics of Machine-Enabled Artworks and the Need for a Rule of Origin

In 2021, an artificial intelligence system wrote a law article. The results were far from perfect but begged the question of whether a human author will still be able to compete against artificial intelligence. Leaving aside the Luddites scenario, this paper starts with the premise that human-made art might be more valued than machine-enabled art. However, to be properly valued, machine-enabled and human-made art must be distinguishable—they are not. Indistinguishability creates an asymmetry in information. This leads to a ‘lemons problem’—that is, a market erosion of good-quality products (in this scenario, human-made products). Against that background, this paper proposes a solution in light of international law and rules of origin. This paper argues that the lemons problem induces the need for a rule of origin labelling work as either human-made or machine-enabled. Determining human or machine authorship may be dauntingly complex when the artwork owes its existence to both humans and machines. One solution may be to review how the country of origin is identified whenever products are not created in a single location and then to apply, mutatis mutandis, to rules of authorship origin the solutions once identified in the context of geographical origins, that is, the so-called ‘substantial transformation test’. In the context of machine-enabled artwork, this test is whether a human edited the machine output and, if so, whether those edits constituted a substantial transformation of the work of art.

Introduction to the Virtual Special Issue: Strategy Science’s Contributions to Doctoral Reading Lists

Introduction to the Virtual Special Issue: <i>Strategy Science</i>’s Contributions to Doctoral Reading Lists

Paying more to make less: value degrading in the coffee value chain in eastern Uganda

AbstractValue upgrading through processing has been a core tenet of value chain interventions focusing on improving smallholder farmer welfare improvements. However, assessing the quality of processed agricultural products may be more difficult than unprocessed products. The resulting information asymmetry between producer and the buyer may lead to perverse outcomes for agrarian households. Using primary panel data collected from over 1500 coffee growing households in eastern Uganda and employing fixed effects approaches, we show that grower‐level post‐harvest processing has characteristics of a market for lemons and is associated with lower coffee income compared with unprocessed coffee production. Activities aiming at moving growers up the value chain should thus be integrated with relevant characteristics of the value chain, such as quality assurance. We add to the literature by presenting a clear description of the pathway from supply chains with asymmetric information over produce quality to diminished farmer welfare with a novel focus on post‐harvest processing.

Are seed accelerators status springboards for startups? Or sand traps?

AbstractResearch SummaryRecent research finds participating in seed accelerators can improve startups' access to growth and funding, but effects are highly heterogeneous. Less understood is whether accelerator participation can also help startups obtain higher‐status early partners. On one hand, participation may improve startups' quality and signal quality to desirable partners. Yet research suggests reasons any signaling effects might be quite small or even negative, since accelerators might be perceived as a “market for lemons.” Using two complementary and proprietary datasets of U.S. startups, we find many seed accelerators are indeed springboards—associated with startups raising from higher‐status investors—but that others have very limited and some slight negative effects. We examine contingencies and mechanisms, and conclude with contributions to literatures on accelerators and organizational status.Managerial SummaryRecent research has found that some seed accelerators help startups' grow and raise funds. In this research, we examine whether accelerators also help startups gain higher‐status investors, which are desirable for the advice, signals, and networks they offer. Yet there are conflicting reasons why accelerators may help or hurt startups in obtaining higher‐status investors. Using two proprietary datasets of U.S. startups, our results suggest many accelerators like Techstars and Y Combinator have notable benefits in helping startups raise from higher‐status investors. Yet we also see substantial differences across accelerators. Interestingly, effects do not appear sensitive to regional entrepreneurial activity. We conclude with implications for entrepreneurs, accelerators, and policy makers.

Lemons, Trade-Ins, and Certified Pre-Owned Programs

Problem definition: We study the economic rationale for certified pre-owned (CPO) programs and characterize the mechanism through which they influence secondary markets to create value for durable goods firms and consumers. Academic/practical relevance: Our study on understanding the market impact of CPO programs is highly relevant for industry given their prevalence in practice. Our work also contributes to the adverse selection literature in the context of the “lemons problem” by uncovering the mechanism underpinning CPO programs and how they improve market efficiency. Methodology: We use a game-theoretic durable goods model that captures CPO program features to identify how CPO programs improve market efficiency. We further investigate how CPO program size, as determined by program qualification criteria, plays a role in improving market efficiency. Results: We show that the mechanism underpinning CPO programs consists of two mutually reinforcing effects: a more effective segmentation of used product buyers through high- and low-quality product differentiation and a higher trade-in discount to used product owners. The former effect generates a higher revenue, which, in turn, allows for a higher trade-in discount. This translates to more high-quality products being traded in, more new products being purchased, and more used products being sold in the secondary market (i.e., increased market efficiency). We also show that these two effects are strengthened as the CPO program size increases. Finally, we test hypotheses deriving from our theoretical results in the context of the U.S. automotive industry. Our empirical findings are consistent with the conclusions of our theoretical work. Managerial implications: Durable goods firms can proactively manage their CPO programs by appropriately setting trade-in discounts and managing price discrimination between CPO and non-CPO products. CPO program qualification criteria can be used to alter CPO program size and, hence, the level of market efficiency improvement induced by these choices. Supplemental Material: The online appendix is available at https://doi.org/10.1287/msom.2022.1176 .

Research on Service-Driven Benign Market with Platform Subsidy Strategy

The benign consumption of two-sided markets and the quality improvement of the supply side is the core of the sustainable development of platform ecology. This paper discusses how the platform uses personalized service values to influence the decision making of manufacturers and consumers, thus improving the health development of the platform ecosystem. By constructing the vertical differentiation model, we find that, different from the unified pricing strategy in the benchmark market, manufacturers in the platform market can implement personalized pricing, according to the different types of consumers’ quality preferences. When the platform service value is less than the product cost difference between manufacturers, low-quality manufacturers may benefit from the platform. Meanwhile, when the platform service value is greater than the product cost difference between manufacturers, the lemon market may appear and platforms should set the differentiated subsidy strategy according to the type of market consumers; this is a dominant strategy. In addition, when the number of consumers with low-quality demand in the market is large, the platform’s subsidies for high-quality products to consumers will guide consumers to buy high-quality products; this will not only promote the development of the benign market, but also improve the platform’s revenue. Finally, the sensitivity analysis shows that the platform service value has a U-shaped impact on the platform revenue and an inverted U-shaped impact on the manufacturers’ revenues.

Illiquid Lemon Markets and the Macroeconomy

Illiquid Lemon Markets and the Macroeconomy

A pathway towards the development and evolution of consumer behavior: Policy directions for sustainable development and improvement of nutrition.

The virtuality, concealment, uncertainty and complexity of online trading make the online food trading market have security risks, while the lack of information, information asymmetry and imperfect market system make the "lemon problem" in the market increasingly obvious. In order to clearly understand and manage the "lemon problem" in the online food trading market, we built an evolutionary game model involving the seller, buyers and online food trading platform, deeply analyzed the formation process of the "lemon problem" in the online food trading market, and revealed the influencing factors and effects of each subject's strategy choice from the perspectives of subsidy, punishment, cost, and benefit. Findings of this study reveal that: (1) In the online food trading market, the strategy of the seller, buyer and platform will be stable in six situations, and the "lemon problem" will emerge with the development and evolution of the online food trading market. (2) The strategy of each subject in the online food trading market will be affected by variables like cost difference between positive performance and negative performance of the seller, punishment from the buyer with positive participation to the seller with negative performance, subsidy from the platform with positive regulation to the seller with positive performance, etc., and different factors have different influence directions and degrees on the subject strategy. (3) In the online food trading market, cost, punishment, subsidy and benefit have different effects on the subject's strategy. Among them, cost and cost difference have the most significant impact on the subject's strategy, followed by punishment and benefit difference, and subsidy and additional benefit have less impact on the subject's strategy. Based on our study findings, it is proposed that by constructing a complete and standardized system of online food trading market from the aspects of examination and verification institution, reward and punishment institution, and supervision institution, it will be able to provide reference for managing the "lemon problem" in the online food trading market, promoting the sustainable development of the market, and ensuring the safety of online food.

Shaping the Perceptions of Fashion Consumers by Influencers on Digital Platforms in the Era of COVID-19

The recent outbreak of COVID-19 is taking the fashion industry through a challenging period. The industry's activities are now being more facilitated by digital platforms/influencers in the dispensation of products than ever before. This study seeks to investigate digital platforms/influencers in developing countries and their impact on the fashion industry. The study also explores the challenges of information asymmetry online, drawing on the lemon market theory (LMT), as the theoretical lens. Qualitative data was collected from twenty-two respondents; the research findings indicate that the use of digital platforms/influencers is essential in reaching the industry's vital consumers. Also, information asymmetry is the greatest challenge as far as e-business is concerned.-The contribution of this study reposes the use of LMT to determine how information asymmetry is leveraged. In terms of the policy, this research provides strategies for discussions on security and trust for policymakers to secure payment and delivery in e-business.

The market for lemons and information theory

Spence’s theory of signaling shows that signals can resolve adverse selections in job markets. Instead of signals, I consider what Spence calls indices and show that if the costs of knowing the indices are not nil, they could play the role of resolving adverse selection in sequential Bayesian games. I also show that by incorporating costs that are measured by the mutual information of indices, adverse selection can be resolved if the costs fall within a certain range.