How are information asymmetries created? What are the implications?

What will be an ideal response?


Frequently, sellers have better information about products and services than buyers, which creates information asymmetries in which one party is more informed than another, because of the possession of private information. When firms transact in the market, such unequal information can lead to a lemons problem.

The important take-away here is "caveat emptor"-buyer beware. Information asymmetries can result in the crowding out of desirable goods and services by inferior ones.

Business

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Indicate whether the statement is true or false

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Select the option that correctly describes an application of the Success Case Method.

a. As indicated in the name, it focuses on success instances and ignores non-success instances. b. The evaluator should randomly select interviewees from those who completed a survey. c. The Success Case Method can be used when investigating Kirkpatrick’s Level 3 or Level 4 outcomes of a training program. d. An anonymous survey should be used to encourage respondents to report whether they are success or non-success cases.

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Obtaining or developing new programs is more difficult than ordering additional hardware.

Answer the following statement true (T) or false (F)

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Which is not a method of employee participation?

a. stock-option plans b. empowerment c. use of teams d. humane orientation

Business