E-Marketing under the Adverse Selection Environment: Model and Case Study

Information asymmetry in e-commerce market causes adverse selection phenomenon that hinders the healthy development of e-marketing. Based on the adverse selection model put forward by American economist George Akerlof , who is one of Nobel Economics Prize laureates in 2001, this paper set up an e-marketing model under the adverse selection environment in e-ecommerce market. This paper takes actual data from Taobao.com in China as samples and demonstratively analyzes the characteristics of adverse selection problems in Chinese e-commerce market. The results showed that reputation mechanism can effectively reduce the appearance of adverse selection, as well as electronic intermediaries and business alliance can offset adverse selection problems. But adverse selection in e-commerce market not only exists but also occurs more serious, which affects the function of e-marketing. Finally, this paper offers some strategic thought and encourages sellers and buyers to trade credibly.