Research On Quality Cost Decision Under Asymmetric Information

With the progress of technology and rapid transmission of messages, market competition is becoming increasingly fierce. Asymmetric information theory gradually become the decision-making of enterprises and consumers. This paper mainly discusses the asymmetric information on consumer preferences, which is based on the biggest constraint of enterprise profits to establish conditions under asymmetric information quality cost model. With the conclusion of the model ,enterprise can develop price, quality level and quality of information asymmetry, and consumers preferences. So as to achieve the objective of maximizing profits.First, the paper gives a specific introduction to the theory of asymmetric information, the causes of it and the degree of information asymmetry.Second, the paper analyses the advantages and disadvantages of traditional quality cost and the main basis for decision-making of quality costs. Trough the combination between the model of traditional quality costs and consumers'costs curve, the paper explains the effect of price on customers'decision on purching, price-making policy and the setting of the quality of products, from which we can reason that the asymmetric of price information is one of the main reasons why quality cost decision of enterprises cannot meet the need of customers'.Third, the paper expounds the consumer utility theory and the effect that the quality Information asymmetry degree has on consumer preferences. And it also establishes a level of quality and the quality of the curve and introduces and establishes the quality cost model of information asymmetry, which is conditional upon the maximization of the enterprises'profit. And the tree makes a good analysis of the effect on the quality cost decision of the enterprises of quality products and bad quality products that the quality asymmetry information degree has .In a word , based on the essay above, a question has been put forward that quality cost needs to be investigated under the conditions of information asymmetry.