The Effect Of Information Disclosure Degree On Consumer Welfare

In 2014, the government paid more attention to the situation of disordered China’s auto maintenance market and also raised consolidation strength of that. At the beginning of 2015, the ministry of transport drafted and ten other ministries published the file Guidance on promote transformation and upgrading of auto maintenance industry and improve service quality in order to change the mess of unripe market structure, abnormal development, non-transparent consumption and dishonesty. This file demands auto companies to publish relevant information of auto maintenance technology to enhance consumer welfare and solve the problem that maintenance technology monopoly of 4S stores under control of auto companies. According to the traditional economics theory, the increase of information disclosure degree is beneficial to increase the market efficiency and promote consumer welfare. However, the effect of increasing information disclosure degree is associated with a number of factors, such as the developed degree of intermediary market and the information processing ability of consumers. The consumer in the face of large amounts of information will produce certain information search, use and pass on cost and so on. The cost can weaken the benefits brought by information disclosure. Based on the heterogeneity of consumer and the indirect effect from the producers, this article emphatically analyzes the comprehensive effect of information disclosure degree on consumer welfare in the current market conditions.In this article, the content is divided into the following section:In the first part, we put forward the research question of this article through the analysis of the increasing degree of information disclosure policy. We also illustrate the structure and research significance of this article. The second part is the literature review, we summarize the research on information asymmetry theory and the literature of scholars’doubt about the traditional theory, and the existing research on the situation of information asymmetry in China’s auto maintenance market in order to get some research ideas to explore the relationship between the degree of information disclosure and market efficiency. The third part mainly analyzes the direct effect of maintenance technology information disclosure degree on consumer welfare. This article analyzes the change of consumer behavior and search cost based on the heterogeneity of consumers through the qualitative and model analysis method. The fourth part mainly analyzes the indirect effect of maintenance technology information disclosure degree on consumer welfare from the perspective of the producers. The degree of information disclosure will influence the market structure, the manufacturer’s innovation motivation and increase the pass on cost from maintenance companies, car companies and the third-party institutions. It will indirectly affect the consumer welfare. The fifth part is conclusion and policy meaning. This article gets the conclusion through the analysis and puts forward suggestions to improve the implementation of information disclosure policy under the condition of current China’s auto maintenance market.Through the research, this article gets three conclusions:a. Maintenance technology information disclosure degree increase is conducive to market competition. It is beneficial to consumers enjoying more choices, more reasonable price and more transparent maintenance services. b. Maintenance technology information disclosure degree increase will make consumer produce more information search and use cost, and pass on cost from producers and the third party, which reduces consumer welfare.c. The construction of mechanism and facilities will restrict the welfare increase from information disclosure policy. So the consumer welfare is the combination results under the directly and indirectly influence of various factors.Based on the analysis of the effect of information disclosure degree on consumer welfare, this article puts forward suggestions to improve the current policy. We think we can improve the auto maintenance industry management system and the third-party management system, establish the platform of network information and related technology information criterion in order to promote the consumer welfare in the process of information disclosure policy improvement. This is also the practical significance of this article.This article also has a certain innovation about theoretical significance. As it has not been long since the promulgation of the auto maintenance technology information disclosure policies, the research on the effects of policy is very less. So this article is proactive in some extent. This is advantageous to rich the literature of information asymmetry theory based on the actual cases in auto industry. At the same time, in the analysis of consumer welfare, this article classifies the consumer based on the heterogeneous characteristics, and makes cross analysis under the different intermediary market environment. In the end, it is concluded that heterogeneous consumers have different welfare under different conditions.As this article is written just a few months after the promulgation of relevant policies, most of the proactive thinking is just based on the theory of information economics caused by the lack of the reality statistical data. Part of the research conclusion still need the support of policy implementation and the accumulating of more data and reality. Therefore, we will continue to focus on policy implementation and make the research more persuasive in the future study.