- Created by: April15
- Created on: 18-02-20 15:46
- Asymmetric information is where buyers either sellers have different amounts of information than the other.The market for second-hand items. The sellers know of the defaults in each product but consumers don't.
- Asymmetric information and market failure: Seller set an average price on a second-hand good. Consumers may think that the price should be lower as the good is below average (it is used), they may bargain for a lower price which the sellers may be unhappy with so they stop selling them in the market. This leads to the disappearance of the market.
- Information Failure/Information Gaps are where buyers, sellers or both do not have the information available to make decisions.
- Imperfect Information is where buyers, sellers or both lack information to make informed decisions.
- Governments provide information to society to make consumers more able to make informed decisions through giving out pamphlets when at…