Research On The Formation Of Exhibition’s Reputation Under Asymmetric Information

Exhibition market has a typical asymmetry of information. The integrity of transaction is vulnerable to disruption under asymmetric information. Reputation has been widely used in different types of market to solve the problems of asymmetrical information as its function of low-cost and self-fulfilling, but it has been little used on exhibition market. Study on the formation and functions of the exhibition’s reputation under asymmetric information can broaden the areas of application of reputation theory to some extent.This paper mainly includes three theoretical models. Firstly, it analyzes the phenomenon of asymmetric information in exhibition market by Akerlof s used car model and points out this phenomenon will result in adverse selection and shrink exhibition market. Then it analyzes the formation process of the exhibition’s reputation under asymmetric information by KMRW model and points out that the pursuit of reputation is an inevitable choice in the incomplete information dynamic game. It also comes to the conclusion that repeated game, effective transmission of reputation information, severe punishment mechanism and constant accumulation are four important conditions for the formation of reputation under asymmetric information. Finally, it discusses the transmission of reputation information mechanism which can efficiently solve the problem of adverse selection by Spence’s signaling game model.This paper takes CAEXPO as an example. It showed the reputation of CAEXPO can’t be effectively transmitted because of the constraints of fierce competitive environment outside and exhibition’s own shortcomings.Those constraints ultimately weaken the inhibitory effect on adverse selection in exhibition. Therefore, CAEXPO can take four routes to improve competitiveness and make up for its deficiencies, so as to promote its reputation information transmit more effectively.