eBay, Amazon, and other Internet shopping sites provide "seller ratings" done by previous buyers, in order to help deal with the problem of
A) adverse selection.
B) externalities.
C) moral hazard.
D) public goods.

Question

Quizplus · Accepted Answer

Seller ratings are used to overcome the problem of adverse selection, which occurs when buyers may not have enough information about the seller's credibility, quality of products, or services. Seller ratings help buyers make informed decisions based on the experiences of previous buyers. This reduces the information asymmetry between buyers and sellers, ultimately reducing the risk of buying from an untrustworthy seller.

EBay, Amazon, and Other Internet Shopping Sites Provide "Seller Ratings