Information failure occurs when people have inaccurate or incomplete data and so make potentially wrong choices
Causes of information failure:
- Long term consequences
- Complexity
- Unbalanced knowledge
- Price information
Asymmetric information is when there is an imbalance between information that different parties know
Government action can improve information to help consumers and producers value the actual cost/benefit of a good/service:
-Compulsory labelling on products
- League tables for schools
- Consumer protection laws
- Industry standards
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