EquiProspect started in May 2020. We embrace horse lovers from all over the world. Our tools & website space flourishes with information. EquiProspect brings to life the data obtained from different breeds of horses. The quality of horses commercialized can reduce due to the presence of information asymmetry existing between buyers and sellers when sellers know more about the horses than the buyers. This may lead to only bad horses in the market by a down-spiral effect which reduces both the stimuli for sellers to offer good horses and the willingness from buyers to invest in a horse.
When horse lovers cannot tell for sure which horses are high-quality in comparison with bad horses, their willingness to pay is driven down in a down-spiral effect. First, this reduction is to the average price that is between the price of a high quality horse and a inferior horse. Later, the price is driven even further down because less horses with good quality are in the market and less people want to buy horses. The down-spiral process makes the market to fail.
The breeders and sellers often know when they have a good or a bad horse. Because the price goes first to the average between the good and bad horse, breeders and sellers will try to sell only the bad ones first, holding the good ones that are often removed from the market. Because the breeders and sellers remove their good horses from the market, the desire of buyers to buy horses reduces further and the mean price of a horse is driven further down. This causes more breeders and sellers to remove more good horses from the market destroying the market in a down-spiral effect. All this happens because breeders and sellers have more information than buyers.
This adverse selection that occurs due to lack of information available to buyers led us to create the EquiProspect to help buyers to find high quality horses for a fair price helping breeders, sellers and buyers to move away from a market collapse.
The theory behind the explanation above was developed by the economist George Akerlof in his paper from 1970. He did not receive much attention at first, but later in 2001 he was recognized awarded the Nobel Prize in Economy along with two other distinct individuals.
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