#information asymmetry
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Information asymmetry - Wikipedia, the free encyclopedia
In economics and contract theory , information asymmetry deals with the study of decisions in transactions where one party has more or better information than the other.
"The market for Lemons: Quality Uncertainty and the Market Mechanism" is a 1970 paper by the economist George Akerlof . It discusses information asymmetry , which occurs when the seller knows more about a product than the buyer. A lemon is an American slang term for a car that is found to be defective only after it has been bought.
The Market for Lemons - Wikipedia, the free encyclopedia
I wrote "The Market for 'Lemons,'" (a 13-page paper for which I was awarded the Prize in Economics) during my first year as assistant professor at Berkeley, in 1966-67. * "Lemons" deals with a problem as old as markets themselves. It concerns how horse traders respond to the natural question: "if he wants to sell that horse, do I really want to buy it?" Such questioning is fundamental to the market for horses and used cars, but it is also at least minimally present in every market transaction.
Writing the "The Market for 'Lemons'": A Personal Interpretive Essay
In economics and contract theory , information asymmetry deals with the study of decisions in transactions where one party has more or better information than the other. This creates an imbalance of power in transactions which can sometimes cause the transactions to go awry, a kind of market failure in the worst case. Examples of this problem are adverse selection , [ 1 ] moral hazard , and information monopoly. [ 2 ] Most commonly, information asymmetries are studied in the context of principal–agent problems .
Information asymmetry - Wikipedia, the free encyclopedia
