Information Asymmetry

What happens when we have incomplete information

Samuel Flender
Predict
Published in
5 min readJan 25, 2019

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Back in 2014 I bought my first used car, a 2005 Volkswagen Golf. I looked up the book value online, and the price the dealer asked for was in line with that number, but there was really no way for me to know if there were any problems with the car. This situation, where one party of a transaction has all of the information about a product, and the other party has very little or no information, is known in economics as an information asymmetry problem.

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