Imperfect Information Flashcards
1
Q
When does information failure occur
A
When people have inaccurate or incomplete data and so make potentially ‘wrong’ choices / decisions
2
Q
Causes of information failure
A
- long term consequences
- complexity
- unbalanced knowledge (buyer knows more than seller)
- price information
3
Q
Examples of asymmetric information
A
Landlords who know more about their properties than tenants
4
Q
Policies for addressing information failures
A
- compulsory labelling in products
- advertising
- campaigns
- consumer protection laws
