COLLOQUIUM ON COMPUTATIONAL SCIENCES AND INFORMATICS – Leveling the Playing Field: Information Asymmetry in the Used Vehicle Buying Process – Hasan and Melkote, CARFAX
COLLOQUIUM ON COMPUTATIONAL SCIENCES AND INFORMATICS
Leveling the Playing Field: Information Asymmetry in the Used Vehicle Buying Process
Monday, January 29, 4:30-5:45
Exploratory Hall, Room 3301
In 1970, Economist and Nobel Prize winner (2001) George Akerlof published a study: “The Market for “Lemons”: Quality Uncertainty and the Market Mechanism” (The Quarterly Journal of Economics, Vol. 84, No. 3. (Aug., 1970), pp. 488-500). In the study, Akerlof attempts to show where, in a market where as seller of a product has more data/information than the buyer of the product, about the product’s quality, will potentially result in “an adverse selection of low-quality products.” In no place is Akerlof’s theory more represented than in the used vehicle market, where buyers and sellers don’t always have the same information about a vehicle’s quality, potentially resulting in low-quality cars being bought and sold. In 1986, CARFAX sought to begin to “level the playing field” between buyers and sellers of used vehicles by collecting, analyzing and making relevant data/information available in the marketplace to both buyers and sellers.
- What data does CARFAX collect?
- Why this data vs other data?
- How does the market drive the type of data collected?
- How does CARFAX analyze and make this data available to answer real world questions?
Is this car safe?
How much should I pay for it?
What’s it worth?
What’s the risk to insure it?
What’s the risk to finance it?
Faisal Hasan is the General Manager, Data & Public Policy at CARFAX. In his over 17 years at CARFAX, Faisal has been responsible for helping to build CARFAX’s Vehicle History Database through public and private data acquisition efforts across North America, including overcoming legislative and regulatory hurdles to data access. Faisal focuses on CARFAX’s efforts to secure and analyze data to feed the CARFAX “Onetime to Lifetime” Game Plan and develop future CARFAX products. Faisal earned his B.A. in Government & Politics at George Mason University and his M.A. in Government at the Johns Hopkins University. Faisal has been a Fairfax County resident for over 35 years. He is married w/four kids, including a GMU Junior studying Biology and a 2017 GMU Kinesiology graduate.
Sri Melkote is Head of Business Analytics at CARFAX. Sri has been at CARFAX for 2 years and leads teams responsible for valuation modeling, pricing analytics, marketing research, media measurement and optimization. He has over 12 years of data science experience. Prior to joining CARFAX, Sri developed dynamic pricing systems, personalized recommendation engines and inventory planning systems for the travel industry. He holds a Master’s degree in Mathematics from Purdue University and a Bachelor’s degree in Chemical Engineering from Indian Institute of Technology, Madras. He is the author of several journal articles and a recipient of the 2011 INFORMS Revenue Management and Pricing Practice Award.