JHASS

Article http://dx.doi.org/10.26855/jhass.2021.07.012

The Internal Relation between Credence Goods, Consumer Perceived Value and Enterprise Performance

TOTAL VIEWS: 6679

Fuyong Lu1, Xintao Wang2,*

1Academy of China Open Economy Studies, University of International Business and Economics, Beijing 100105, China.

2School of Business, Renmin University of China, No. 59, Zhongguancun Street, Haidian District, Beijing 100872, China.

*Corresponding author: Xintao Wang

Published: December 16,2021

Abstract

At present, there is significant information asymmetry in the credence goods market, which causes difficulties in market supervision, consumers’ choice and enterprises’ reverse elimination. The release of credence goods signals enhances the perceived value of consumers, thus increasing the propensity to consume and further improving enterprise performance. This paper takes tea, a typical trusted product, as the empirical research object, and collects a wide range of data samples to study how consumers who lack effective information perceive the mapping value of credence goods and how it affects the business performance of enterprises. The results show that credence goods improve enterprise performance through social value, functional value, investment value and service value, which affect consumers’ attention. From the empirical level, this paper reveals that the commodity attribute of credence goods determines the degree of market information asymmetry to a certain extent, and the business performance of enterprises is inseparable from the effective transmission of information under the guidance of market price mechanism. The research further puts forward some suggestions and inspirations for enterprises’ product development in information asymmetric market.

References

Alsan, M., Garrick, O., Graziani, G. (2019). Does diversity matter for health? Experimental evidence from Oakland [J]. American Economic Review, 2019, 109(12): 4071-4111.

Dai, H., Chan, C., Mogilner, C. (2020). People rely less on consumer reviews for experiential than material purchases [J]. Journal of Consumer Research, 2020, 46(6): 1052-1075.

Dulleck, U., Kerschbamer, R., Sutter, M. (2011). The economics of credence goods: An experiment on the role of liability, verifiability, reputation, and competition [J]. American Economic Review, 2011, 101(2): 526-55.

Hackmann, M. B., Kolstad, J. T., Kowalski, A. E. (2015). Adverse selection and an individual mandate: When theory meets practice [J]. American Economic Review, 2015, 105(3): 1030-66.

Legros, P., Newman, A. F. (2013). A price theory of vertical and lateral integration [J]. The Quarterly Journal of Economics, 2013, 128(2): 725-770.

Seim, K., Waldfogel, J. (2013). Public monopoly and economic efficiency: evidence from the Pennsylvania liquor control board’s entry decisions [J]. American Economic Review, 2013, 103(2): 831-62.

Spiller, S. A., Belogolova, L. (2017). On consumer beliefs about quality and taste [J]. Journal of Consumer Research, 2017, 43(6): 970-991.

Zhou Jiehong, Jin Yu, Wang Yu, Liang Qiao. (2020). Quality information disclosure, signal transmission and agricultural product certification: A comparative analysis based on meat and vegetable industry [J]. Issues in Agricultural Economy, 2020(09): 76-87.

How to cite this paper

The Internal Relation between Credence Goods, Consumer Perceived Value and Enterprise Performance

How to cite this paper: Fuyong Lu, Xintao Wang. (2021) The Internal Relation between Credence Goods, Consumer Perceived Value and Enterprise Performance. Journal of Humanities, Arts and Social Science5(2), 275-280.

DOI: http://dx.doi.org/10.26855/jhass.2021.07.012