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Economics REVISION 5 (micro) > Imperfect Information > Flashcards

Flashcards in Imperfect Information Deck (4)
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1
Q

When does information failure occur

A

When people have inaccurate or incomplete data and so make potentially ‘wrong’ choices / decisions

2
Q

Causes of information failure

A
  • long term consequences
  • complexity
  • unbalanced knowledge (buyer knows more than seller)
  • price information
3
Q

Examples of asymmetric information

A

Landlords who know more about their properties than tenants

4
Q

Policies for addressing information failures

A
  • compulsory labelling in products
  • advertising
  • campaigns
  • consumer protection laws