Ib Extended Essay About Economics

Table of contents:

I Introduction………………………………………………………………………………..2

II Literature Review and background……………………………………………..3

0.1 “Lemon market”……………………………………………………………………………………….3

0.2  “Singles’ Day”…………………………………………………………………………………………..3

III Research Methodology and Plan………………………………………………..4

Section 1 the emergency of “lemon market” in Chinese e-commerce market.5

1.               E –tailer’s perspective……………………………………………………………………5
2.               Consumer’s perspective………………………………………………………………..7

Section 2    Solutions of preventing “adverse selection”………………….9

Section 3    Research Findings and Analysis……………………………………..11

3.1                Acceptance rate of consumers……………………………………………………….11

3.2                Acceptance rate of sellers……………………………………………………………...11

3.3                Feasibility rate of consumers………………………………………………………….11

3.4                Feasibility rate of sellers…………………………………………………………………12

3.5                Influence on consumers’ purchase intention…………………………………..12

Section 4  Evaluations……………………………………………………………………..14

4.1                Efficiency of “returning policy” from social aspect………………………….14

4.2                Efficiency of “returning policy” compared to other possible solutions.14

4.3                Limitation of research……………………………………………………………………..15

Section 5  Conclusion……………………………………………………………………….16

5.1                Summary of research findings………………………………………………………..16

5.2                Limitation of research……………………………………………………………………16

5.3               Further investigation……………………………………………………………………..16

Appendix 1

Appendix 2

Appendix 3

Appendix 4

Introduction

The tendency of e-commerce to grow at a dazzling speed seems unlikely to stop, especially after Alibaba accumulated 9.3 billion dollars in sales revenue on Singles’ Day in 2014(Hatton). However, critics argue that the “lemon problem” – which arose by a miscommunication of information between sellers and buyers, will eventually lead to the e-commerce market collapse sans government intervention. In order to prevent this from happening, The State Administration for Industry And Commerce Of China released an enhanced consumer protection regulation in March, 2014, stating that any e-tailer should accept the full refund request from consumers within 7 days. ("New Framework For Online")