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| Research on the Relationship between E-Commerce Market and Traditional Market Based on the Adverse Selection Perspective |
| PAN Yong |
| Henan University of Economics and Law |
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Abstract The emergence and rapid growth of electronic commerce reflects its dominant advantage under the information environment, which means that traditional markets may be replaced by e-commerce market. However, the adverse selection problem significantly limits the substitution effect. Based on the classic model of adverse selection (Akerlof, 1970), this paper has constructed the two-market (traditional market and e-commerce market) adverse selection model to prove the quality of uncertainty associated with adverse selection may evoke channel conflict between e-commerce market and traditional. The paper has got conditions about market segments and market equilibrium. The paper tries to reveal the academic reason for coexistence of traditional markets and the e-commerce and present new interpretation of channel conflict for the two markets. At last this paper put forward the strategic suggestions under adverse selection according to the model.
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Received: 01 September 2010
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Corresponding Authors:
PAN Yong
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2011, Vol. 1 
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