EBay, the Online Auction Company, Has an Impressive Portfolio of Cooperative

question 49

Multiple Choice

eBay, the online auction company, has an impressive portfolio of cooperative agreements. This portfolio includes an agreement with the U.S. Postal Service to facilitate the shipping of goods purchased through eBay auctions, an agreement to allow MBNA to use eBay's name on a credit card, and an agreement in an online auction company in Korea that is supplemented with an investment by eBay in the Korean partner. In addition, at one time eBay had formed an independent firm, called eBay Australia and New Zealand, with an Australian company known as ecorp.
-If, prior to entering the cooperative agreement with eBay, eBay's Korean partner stated that it had the technological capabilities to facilitate eBay's Korean auction business when, in fact, the Korean company did not have these capabilities, this would be an example of

• A) adverse selection.
• B) explicit collusion.
• C) moral hazard.
• D) holdup.

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Definitions:

Negotiations

The process by which two or more parties with differing objectives discuss an issue in an attempt to reach a compromise or agreement.

Longhouse

A type of long, proportionately narrow, single-room building traditionally built by peoples of the indigenous tribes in North America.

Cultural Practices

Refers to the shared ways of life, including traditions, languages, rituals, and customs, that characterize a particular society or group.

Agricultural Practices

Methods and techniques used in farming and livestock raising to increase productivity and sustainability, including crop rotation, irrigation, and use of fertilizers.