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Flashcards in Asymmetric Information Deck (3)
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asymmetric information

one party has more information in transaction than another


examples of asymmetric information

someone selling land may know that neighbouring land is used for chemical plant but with holds that information when selling - consumer will pay too much for land


solutions to asymmetric information

legislation to punish insider information although difficult to enforce
promote information (e.g. make internet access human right)