Information gaps

Question 1

Asymmetric information

Answer 1

Where parties have unequal access to information in a market.

Question 2

Information failure

Answer 2

Information failure occurs when people have inaccurate, incomplete, uncertain or misunderstood data and so make potentially ‘wrong’ choices.

Question 3

Symmetric information

Answer 3

For markets to work, there needs to be symmetric information i.e. consumers and producers have the same level of knowledge about the products, and they know everything there is to know about them and the effects of consuming them.