Unformatted text preview: 1. Asymmetric Information 2. Expensive to get Asymmetric information 3. If buyers could easily get information 4. If sellers could easily release information 5. Different quality, categorizing products by quality 6. No government interference Real World-Counteracting Institutions 1. Warranties for durable goods 2. Brand names and chain stores 3. Licensing practices 4. All aim to reduce asymmetric information Remember: Asymmetric information, adverse selection Risk Uncertain information The cost of not having complete information when buying a product...
View Full Document
- Winter '08
- Economics, real world, Information asymmetry, Akerlof Paper