information refers to a market where one side (either the buyer or the seller, but usually the buyer) has less information than the other side of the market. When there is asymmetric information in a market, markets are inefficient because the side with less information doesn't want to take the risk involved in buying (or selling) the good or service. One method of solving this problem is through screening. Screening is a strategy one uses when they don't have information. A screen can be any indicator that lets the screener know if the good or service is reliable and will meet the screener's wants. Offer an example of when you used screening to solve a lack of information. What kind of screen did you use? • Was the screen effective? Were you happy with the result?
information refers to a market where one side (either the buyer or the
seller, but usually the buyer) has less information than the other side of the
market. When there is asymmetric information in a market, markets are inefficient
because the side with less information doesn't want to take the risk involved in
buying (or selling) the good or service.
One method of solving this problem is through screening. Screening is a strategy
one uses when they don't have information. A screen can be any indicator that
lets the screener know if the good or service is reliable and will meet the
screener's wants.
Offer an example of when you used screening to solve a lack of
information. What kind of screen did you use?
• Was the screen effective? Were you happy with the result?
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