Information Gaps Flashcards
What is information failure
Information occurs when people have inaccurate, incomplete, uncertain or misunderstood data and as a result make potentially wrong or sub-optimal choices
Causes of information failure
Misunderstanding true costs/benefits
Uncertainty about costs and benefits
Complex information
Inaccurate or misleading information
Addiction
Lack of awareness
Habitual Purchase
When does an information gap occurs
When people have inaccurate, incomplete, uncertain or misunderstood data and make potentially wrong choices
What is symmetric information
Consumers and producers have equal knowledge
What is asymmetric information
When there is an imbalance in information between buyer and seller
What is perfect information
When buyer and/or seller have a complete understanding of the quality and nature of a good or service
What is imperfect information
When a buyer and/or seller lacks a complete understanding of the quality and nature of a good or service
