EBay operates the worldâs largest online auction. In early 2008, eBay operated in 39 counties with 276 million registered users worldwide. Total value of all successfully closed items in 2007 was 59 billion with an average of $2,039 worth of goods trading onsite every day. Items can be sold at a fixed price or through an auction. The high bidder at the conclusion of the auction must contact the seller within three business days to claim the item and arrange payment and delivery.
The Feedback Forum is a place where eBay users can leave comments about each otherâs buying and selling experience. Bidders can get feedback on the seller and vice versa. Each participant is given a feedback score based on the number of positive and negative comments received. Colored stars flag participants with sufficient positive ratings. The highest rating receives a red shooting star. EBay has created policies that guard against manipulation and feedback abuse.
EBay users are encouraged to settle transactions through PayPal. PayPal provides free insurance of up to $2,000 on some items to protect buyers in case they do not receive the item or it was less than expected.
Participants sign userâs agreements that specify trading rules and expectations. The safety staff at eBay investigate alleged missuses at eBay such as fraud trading offenses, and illegally listed items. Resolution include banning a person from future trading on eBay.
How does eBay create value?
What potential contracting problems exist on eBay
How does eBay address the problem
What are the contracting cost at eBay
EBay claims that it has only a small problem with fraud and misuse of the system. Does this imply that it is overinvesting in addressing potential contracting problems? Underinvesting? Explain.
Sample Solution
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Coca-Cola: Coca-Cola is the most popular and biggest-selling soft drink in history, as well as the best-known product in the world. Created in Atlanta, Georgia, by Dr. John S. Pemberton, Coca-Cola was first offered as a fountain beverage by mixing Coca-Cola syrup with carbonated water. Coca-Cola was introduced in 1886, patented in 1887, registered as a trademark in 1893 and by 1895 it was being sold in every state and territory in the United States. In 1899, The Coca-Cola Company began franchised bottling operations in the United States. Coca-Cola might owe its origins to the United States, but its popularity has made it truly universal. Today, you can find Coca-Cola in virtually every part of the world. Available in the following flavours: Cola, Cola Green Tea, Cola Lemon, Cola Lemon Lime, Cola Lime, Cola Orange and Cola Raspberry. 2. Product/Brand Name: Diet Coke Drink Type: Soft Drink Diet Coke: Diet Coke was born in 1982 and quickly became the No. 1 sugar-free drink in diet-conscious America. Known as Coca-Cola light in some countries, itâs now the No. 3 soft drink in the world. Diet Coke is the drink for people who want no calories, but plenty of taste. Available in the following flavours: Black Cherry Cola Vanilla, Cola, Cola Green Tea, Cola Lemon, Cola Lemon Lime, Cola Lime, Cola Orange and Cola Raspberry.>
