E-bay, Amazon and other Internet shopping sites provide "seller ratings" done by previous buyers, in order to help deal with the problem of:

Question

Quizplus · Accepted Answer

Seller ratings are meant to help address adverse selection, which is the problem of buyers being unable to distinguish between high-quality and low-quality sellers in a market with imperfect information. By providing feedback from previous buyers, seller ratings can help buyers make more informed decisions and reduce the risk of purchasing from a low-quality seller. Externalities, moral hazard, and public goods are not directly addressed by seller ratings.

E-Bay, Amazon and Other Internet Shopping Sites Provide "Seller Ratings