Chicken_and_Egg_Problems

Chicken_and_Egg_Problems - University of Southern...

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University of Southern California Marshall School of Business BUAD 307 Lars Perner, Ph.D., Instructor Marketing Fundamentals Spring, 2012 THE “CHICKEN-AND-EGG” PROBLEM A potential “chicken-and-egg i ” problem may exist when it is necessary to have two conditions—each of which depends on the other—met before a product or exchange is possible. One type of these problems comes about when it is necessary to have a large number of buyers before potential sellers are motivated to produce the product, but buyers will only be attracted when the product (or accessories) is available. For example, it would be very difficult to start an online auction service competing with eBay. Sellers would not be motivated to list their products before there were buyers around to bid on them, and buyers would not be motivated to visit a site has few if any listings. When credit cards were first introduced, a similar situation existed: Merchants were not motivated to start accepting
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