1.3.4 - Information Gaps Flashcards
(3 cards)
1
Q
Symmetric Information
A
Where buyers and sellers have exactly the same level of information about the good/service.
Symmetric information is likely to occur in markets where there are high levels of transparency.
2
Q
Asymmetric Information
A
Occurs when one party has superior knowledge compared to another. different levels of information available to them.
3
Q
What does information gaps lead to ?
A
Information gaps lead to market failure as there is a misallocation of resources due to incomplete or asymmetric information among buyers and sellers.
