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http://dx.doi.org/10.22156/CS4SMB.2021.11.01.080

The Short-Term Effect of Low-Quality Sellers' Voluntary Information Disclosure  

Huh, Seung (College of Business Administration, Incheon National University)
Publication Information
Journal of Convergence for Information Technology / v.11, no.1, 2021 , pp. 80-90 More about this Journal
Abstract
This study examines whether, when, and how sellers with low-quality products can instantly enhance profitability by fully disclosing quality information. Our analytic model has found that a low-quality seller can increase demand even in the short run by voluntarily sharing the information about its quality, if he can sufficiently reduce perceived risk of buyers. Moreover, a low-quality seller's information disclosure may increase both the market's and the competitor's demand, depending on the level of perceived risk. The finding of this study is expected to provide meaningful implications to managers and policy makers on solving market dilemmas under information asymmetry.
Keywords
Information asymmetry; Information disclosure; Perceived risk; Risk sensitivity; Customer orientation;
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