Good Example Of Ebay Case Study Case Study
1. From a consumer’s and seller’s perspective, list (2) (remaining) transaction costs (besides search) of buying and selling within an unregulated OAM? Be specific, and reference transactions cost ideas used in class.
Policing and enforcement of the costs is defined by the supervision process involved in ensuring that a contract is fulfilled as appropriate. Essentially, the idea is to ensure that both parties involved in a transaction process stick to their commitments. There may be deviations in contract fulfillment, and litigation cost is a tool used in this transaction method to ensure that in an OAM environment, the contracts are adhered to as appropriate. The search and information cost involves a system, where parties have different sets of information yet transaction, is supposed to be based on equal terms. Case in point is that information has to be availed on a relatively equal measure to ensure effective decision-making.
2. How has eBay refined OAMs? List 2-3 specific web site features those eBay ads that are not found on unregulated OAMs that merely link buyers and sellers? Be specific.
The extent to which Ebay has refined OAM cannot be over emphasized. One of the specific ways in which OAM has been reformed is the introduction of protection system for the sellers and the buyers. Essentially, the company has designed a feedback system that enables the transacting partners to receive information from both ends to ensure that there is transparency in the various processes. Consequently, the company has incorporated PayPal to enhance and secure transaction processes. The company has established ways of protecting individuals in so far as unpaid system is concerned. In the event of a buyer defaulting on paying for items won, records are kept, and a disciplinary action instituted to deal with the problem.
Limitation of privileges and rewarding sellers putting credit on the buyer's transaction account are some of the ways the company punishes the defaulters. The idea of entering an agreement with PayPal in so far as transactions are concerned has ensured secure money transfer system. For instance, PayPal guarantees, refunds for both sellers and buyers in the event that there is a mishap in either obtaining products or services from both ends. Particularly, the transaction agreement with PayPal strengthens the rules and regulations as well as empowers the contract.
3. Describe (2) ways that EBay’s unique features add value to OAMs. Be specific in your explanation.
EBay’s unique features add immense value to the OAM. For instance, it is important for an OAM to have a feedback system that effectively monitors how transactions are done and the extent to which activities of sellers and buyers enhanced. Essentially, the feedback system provides a mean of communication between the sellers and the buyers making it possible for the company to track activities that are not within the stipulated boundaries. In addition, the unique features enhance transparency in operations. There are a number of areas where transactions are required. For instance, in the transaction process, it is important for the buyers and the sellers to monitor how their money flow from one end to the other and by incorporating PayPal. It is easy to determine the flow of the process with this process. The transparency aspect assists in tracking defaulters who bid for items and fail to owner their commitment to the course as appropriate. The features have immense value to the OAM, and they make the company exhibit a level of sanity in doing business and carrying out transactions.