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Question pertaining to EBay

1. How does eBay create value?
2. What potential contracting problesm exist on ebay?
3. How does eBay address these problems?
4. What are the contracting cost at ebay
5. EBay claims that it has only a small problem with fraud and misuse of the sytem. Does this imply that it is overinvesting in addressing potention contracting problems? Underinvesting? Explain.

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1) Ebay creates value by bringing together buyers and sellers in online marketplace in an organized and safe way enabling people to buy and sell wide variety of goods. Ebay's value proposition comes from the fact that it has provided a kind of platform for all those people who hate to go out in the physical marketplace and love to shop in the convenience of their living rooms. It has not only created a huge marketplace but also won the trust of thousands of buyers and sellers by providing way for secure and safe transactions.

2) Some of the potential contracting problems are:
1) misuse of online marketplace in the form of trading on banned items such as animal skin
2) Selling of damaged products and inferior products by fraudulent sellers.
3) Frauds in ...

Solution Summary

Question pertaining to EBay

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