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Unformatted text preview: Buyers earn a profit by purchasing the product for less than they can sell it back to me. Sellers choose 1 of 3 quality levels: A, B, or C, and write this choice on a piece of paper. W.R. Knechel Information Asymmetry Not real money; act as though it is. Market Quality Negotiated # Selection Price - Cost = Profit 1 2 3 4 5 Sell Market Back Negotiated # For - Price = Profit 1 2 3 4 5 Seller Profit Book Buyer Profit Book...
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- Fall '08