What is an'asymmetric information' market?
A market where all participants have the same information
A market where certain participants have more or better information
A market that only functions in a certain hemisphere
A market that is skewed in favor of certain participants
Answer
Asymmetric information markets occur when some participants possess superior or exclusive knowledge about a particular market or transaction, giving them an advantage over others. This can lead to inefficiencies and unequal distribution of benefits, often requiring specific measures or regulations to address the information asymmetry.
Mastering Economics: The Michael Spence Quiz
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