Let's take the production of thermos cups in Zhejiang Yongkang hardware small enterprise cluster as an example to illustrate the "lemon market" caused by excessive competition. Hardware is the traditional industry of Yongkang. Yongkang is known as the "hometown of hardware", and small enterprise clusters with clear property rights account for 70% of the city's industrial organization structure. The craftsman spirit of "running around the world" passed down from generation to generation has formed the advantage of the city's hardware industry in the domestic hardware product market. It is said that "as long as there is a demand wind for hardware products in any corner of the country, it will set off a corresponding manufacturing wave in Yongkang's small enterprise cluster." However, due to the lack of corresponding humanistic environment and control means, the phenomenon of "lemon market", which leads to the failure of market mechanism, has also occurred one after another. In recent years, weighing instruments, gas stove accessories, copper chafing pots, rice cookers, power tools, aluminum mops, fitness equipment, thermos cups and other products have been leading for one or two years, and their life cycles are even only four months. Among them, the production of thermos cups is the most typical. Until April 1995, the production of stainless steel thermos cups in this city was limited to a few small batches, and the number of manufacturers gradually increased from May to June. After September, due to the smooth supply and marketing channels and the price difference between manufacturing cost and market sales price (peak sales profit accounts for almost 50% of the sales price), products are in short supply, and a large number of small enterprises with hardware products switch to production. 11-65438+during the peak period of February, there were 1300 manufacturers specializing in the production of thermos cups and their supporting facilities, and the production line of thermos cups in the city expanded to more than 2,000. The annual output value of 15-6595 thermos cup was estimated. However, the good times did not last long. After 65438+2 months, the output began to drop sharply. Two months later (that is,1February 1996), the monthly output value was only 1/8 of the peak period. In Yongkang, it is called a new round of "short-lived" industry. Many domestic economists attribute this phenomenon to product homogeneity, low technical level and the short-term behavior of individual and private entrepreneurs to "earn one vote" and so on. However, the author thinks that these analyses are unfair, and the fundamental reason should be the "lemon market" effect caused by the asymmetric distribution of quality information. George akerlof believes that the uncertainty of product quality is an unfavorable choice in the general commodity sales market (Note: The so-called unfavorable choice means that in the commodity consumption market, the party with less information is at a disadvantage due to the asymmetric distribution of product quality information. The root cause of). When goods in the market are exchanged with different qualities, both buyers and sellers will classify products according to product quality in the same way. However, only the seller can observe the quality of each unit product he sells, while the buyer can only observe the distribution of product quality at most before buying, that is to say, the buyer can't know the specific quality of each unit product exactly before buying the product, but can only know the average distribution of such product quality at most. Because the buyer has no other way to determine the specific quality of each unit product, low-quality products are often sold together with high-quality products. From the buyer's market, it is unfavorable to choose in such a market. The reason for this market failure can be explained as follows: there is externality between high-quality products and low-quality products. When the buyer makes a decision to sell low-quality products, it will have an impact on the buyer's understanding of average quality, because the products that are most likely to be offered for sale are always the products that the seller wants to give up, and this behavior that the seller wants to give up often includes the quality information (including false quality information) about the products that the seller wants to convey to the buyer, so that the seller of high-quality products is damaged and gradually withdraws from the market, thus forming a vicious circle of product quality in the "lemon market".
Suppose there are two kinds of thermos cups-high quality cups and poor quality cups. Suppose both buyers and sellers know which cup is of high quality and which cup is of low quality. So there will be two markets as shown in figure 1 and figure 2. In figure 1, S[, H] is the supply curve of high-quality cups, and D[, H] is the demand curve. Note that S[, H] is higher than S[, L], because the manufacturing cost of high-quality cups is higher than that of low-quality cups, so the owners are willing to sell them at a higher price. Similarly, D[, H] is higher than D [,L], which is because dealers are willing to pay more for obtaining high-quality thermos cups. If at the beginning, the market price of high-quality cups is RMB in 50 yuan and the low-quality cups are RMB in 25 yuan, then the daily sales volume of each cup is 200,000. In the actual market transaction, the producers of thermos cups know more about the quality of cups (such as material, vacuum degree, service life, etc.). ) not the buyer. So, let's consider what will happen if the quality information is unbalanced. (Dealers found quality problems after buying thermos cups and reselling them to users for a period of time. Of course, there are also factors due to institutional problems or unethical behaviors of dealers and store managers, such as conspiring with manufacturers to slaughter consumers in order to obtain super-high profits. Of course, it is another matter. At first, dealers may think that there is a 50% chance that the quality of the thermos cups they buy is high (because if both dealers and manufacturers know the quality of the cups, and the daily output of these two kinds of cups is 200,000, then only manufacturers can know the quality of each thermos cup, and dealers can only observe the distribution of the quality of the thermos cups at most). Therefore, at the time of purchase, the distributor will regard all thermos cups as "medium" quality. In figure 1 and figure 2, the demand for medium-quality thermos cups is represented by D[, M], which is lower than D[, H] but higher than D[, L]. As shown in the figure, there will be fewer high-quality cups (65438+ 10,000) and more low-quality cups (300,000).
When dealers began to realize that most of the thermos cups sold were of poor quality, their demand shifted. As shown in figure 1 and figure 2, the new demand curve may be D[, LM], that is to say, on average, the thermos cups are of medium and low quality. Therefore, the demand curve moves further to the left, which makes the manufacture of thermos cups turn to low quality. This movement will continue, which will lead to a vicious circle of cutting corners and quality in the manufacture of thermos cups until the low-quality cups completely occupy the market. At this time, the market price is too low to manufacture any high-quality thermos cups on the market, so dealers correctly assume that any thermos cups they buy are of low quality and the demand curve will be D[, L]. This process vividly shows that low-quality goods drive high-quality goods out of the market because of information asymmetry. In fact, any small business cluster is competitive in producing certain products. Once the "lemon market" effect appears in small enterprise clusters, they will eventually become manufacturers of fake and shoddy goods, and as a result, dealers and consumers will eventually turn to other enterprises or clusters that produce similar products. This is also the reason why Yongkang's hardware enterprise cluster has repeatedly experienced ups and downs in product production. The production curve of its thermos cup is shown in Figure 3.
Figure 3 1995 Changes in the monthly output value of Yongkang thermos cup industry (monthly output value of 10,000 pieces)
(The data comes from the tax analysis data of Yongkang Finance Bureau of Zhejiang Province 1995)
It must be pointed out that this lemon market effect is almost a common phenomenon in the early development of small business clusters, which is determined by the organizational structure characteristics of small business clusters. Taiwan Province Province, Italy and Japan have experienced similar situations in their economic development history.
How to eliminate this trap in the development of small clusters? The author thinks that the asymmetric information distribution of product quality must be solved, which is the fundamental reason for the emergence of "lemon market".
Information economics believes that in order to solve the market failure or inefficiency caused by information problems such as unfavorable selection and immoral behavior, it is necessary to effectively create and disseminate "positive" market information (Note: See Xie Kang's Microeconomics of Information, Sun Yat-sen University Press, 1 19). ), so that the market paralyzed by information asymmetry can play a role again. It is not difficult to understand that this "positive" market signal is an effective means to correct information incompleteness and asymmetry. Specific measures can be divided into the following categories:
First, quality assurance and trademark strategy. Manufacturers of high-quality products often convey information about the positive market of product quality to consumers through quality assurance (return, replacement, repair and quality assurance system, etc.). ) and the registered trademark system. High-quality products are distinguished from counterfeit products-lemon products by "positive market information". The key to the success of this strategy lies in either making low-quality products unable to provide similar information, or making manufacturers of low-quality products produce similar signals at a much higher cost than manufacturers of high-quality products. Of course, the increased cost of brand-name manufacturers or producers of high-quality products to create "positive market signals" is ultimately borne by consumers. Here, the price difference between brand-name products and non-brand-name products can be regarded as the cost for consumers to find quality products among non-brand-name products. Due to the continuous dispersion of product quality in the market, consumers are at a disadvantage of information asymmetry, and the cost of searching for high-quality products among non-brand products is usually extremely high. In this environment, consumers are naturally willing to buy high-priced brand-name goods. The popular "regional famous brand" in Italy and other places is actually an effective strategy to create the "positive market signal" enjoyed by the whole small enterprise cluster.
Second, the strategy of updating the humanistic environment of small business clusters From the above discussion, we can see that the internal mechanism of maintaining the normal operation of small business clusters, reducing the transaction cost of intermediate products and properly coping with external market changes is the humanistic environment within the cluster, and the core of this humanistic environment is the owner's cooperative spirit with trust and commitment as the main content. Without this spirit of cooperation, the vicious competition among "homogeneous" small business owners will grow and spread rapidly, fine specialization will be unsustainable, and the overall external competitiveness of small business clusters will also die out. Therefore, it is a good strategy to update the internal cultural environment of small business clusters by using the "five-sided" culture and the two-sided and three-sided regulatory model proposed by Williamson to prevent many small business clusters in China from falling into the "lemon market" during their development.
Thirdly, the strategy of cultivating market middlemen and brokers can also reverse the market failure caused by information asymmetry to some extent. Although middlemen and brokers themselves cannot be signals of product quality, they can strengthen or concretize market signals. These middlemen and brokers use their professional knowledge to identify or identify the quality of products, and build credibility by selling high-quality products at high prices and inferior products at low prices. Once the business reputation of middlemen or brokers is established, the unfavorable selection situation caused by information asymmetry between buyers and sellers can be improved; Sellers of high-quality products can sell their products at reasonable prices through brokers, and the commission paid to brokers for this is lower than the utility loss suffered by sellers in selling products directly in asymmetric markets; On the other hand, buyers who want to buy high-quality products can buy high-quality products at acceptable prices through brokers, and the commission paid to brokers is lower than the cost of buyers searching for high-quality products in asymmetric markets. Whether in the primary small enterprise cluster, the final consumer goods and intermediate products change brokers and middlemen from "guerrillas" to "tenants" through the way of "specialized market", or in highly industrialized countries and regions, the "OEM" (OEM) production mode with commercial enterprises as the mainstay is a successful mode to cultivate market middlemen and brokers.
Fourthly, the quality standardization control strategy of products and parts. American economist Robert S Pindick has a wonderful description of this strategy. He believes that "sometimes it is impossible for an enterprise to make a reputation. For example, most customers in restaurants or motels along the highway have only been there once or several times, so they have no chance to become famous. So, how do these restaurants and hotels handle the lemon problem? One way is through standardization. In your hometown, you may not want to eat at McDonald's often. But McDonald's looks more attractive when you are driving on the highway and want to stop for lunch. The reason is that McDonald's provides a standardized product. " (Note: See the Chinese translation of Microeconomics by Pindick Rubinfeld, Renmin University of China Press, 1997, p. 490. For small business clusters, it is very effective to establish local trade associations to formulate and coordinate product quality control standards to improve the product quality of clusters, so as to stop cutting corners caused by excessive competition. Because of these "quality standard controls", the information about product quality is clear and specific, and the cost for consumers to search for quality products is greatly reduced. The author once worked out the relevant quality standards in the low-voltage electrical appliance enterprise cluster in Liushi, Yueqing City, Zhejiang Province, and set up a corresponding testing center to manage this work. Later facts verified the effectiveness of this strategy in preventing the emergence of "lemon market" and stopping vicious competition among enterprises. At present, Liu's electrical appliance enterprise cluster has more than 200 production licenses (accounting for12 of the whole country), making it the largest export base of low-voltage electrical appliances in China.
In addition to the above four strategies, we should also establish and develop the means of production market and capital trading market to reduce the obstacles for enterprises to quit.
Editor Du, author Chou Baoxing.
The author is the secretary of Jinhua Municipal Committee of Zhejiang Province, and a doctoral student in Fudan University.