Research on the 'Lemon' Problem for Chinese Online Shopping Market

摘要

With the development of online shopping, the "lemon" problem for this market has been a problem that needs to be dealt with as soon as possible. The lemon problem, buyers making adverse selections because of information asymmetry, causes high-quality items being forced out by inferior ones and the decline of average quality of products, which finally leads to lower market operation efficiency. From the perspective of credit identification system, this paper presents the trend of lemon problem for online shopping market through empirical research, and gives solid evidence of the fact that the present regulation mechanism dealing with the market for "lemons" only has limited effect. In order to figure out a better regulation mechanism, the paper analyses the origin of the problem based on the fundamental characteristics of online shopping. Furthermore, the paper investigates two key factors, "information asymmetry" and "the motivation and ability of the sellers" so as to form a new regulation mechanism.