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 eBay's Australian partner agreed to provide marketing and technological skills to help eBay compete in the Australian and New Zealand auction industries but provided skills that were significantly lower than promised, this would be an example of

Question

Quizplus · Accepted Answer

This scenario describes moral hazard, where the Australian partner did not fulfill their promise to provide the expected level of skills and services, potentially causing harm or loss to eBay. The other options do not accurately fit this scenario - holdup refers to a situation where one party has the power to renegotiate a deal to their advantage, adverse selection refers to a situation where one party has more information than the other and uses it to their advantage, and tacit collusion refers to a situation where firms in the same industry indirectly coordinate their actions to maintain market power.

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