Gov solution for Asymmmetric info

Question 1

What is one way government can intervene to solve asymmetric info ?

Answer 1

Governments can intervene with regulation. For example, if you find a fault in a car you bought after 6 months after buying it, the seller is required to provide a full refund, replacement and repair. Even if there is asymmetric info, the seller would lose out even more if the car is dodgy.

Question 2

What is another way government can intervene to solve asymmetric info ? And give and example

Answer 2

Government will employ regulators in order to regulate and make sure sellers are not exploiting their consumers. For example in private health care or dentistry.

Question 3

What are other examples of asymmetric info ?

Answer 3

In housing, estate agents and house lords may try to sell dodgy apartments to maximise profits. In antique exchanges, buyer may know more tha the seller and provide less money than what it is actually worth and exploit the seller.