Information Assymetries as the Main Source of Market Failure Affecting the Consumer

Gabriela Gheorghiu ()

Ovidius University Annals, Economic Sciences Series, 2013, vol. XIII, issue 1, 494-499

Abstract: The reality of daily life gives us sufficient examples of situations in which individual decisions within free market do not automatically and warranted lead to a global economic optimum. Such a situation is denominated as “market failure”, both understood as “the failure of a more or less idealized system of price-market institutions to sustain “desirable” activities or to stop “undesirable” activities” [1], but also as any performance of the market which is considered less better than the best performance possible [2]. Specialized economic literature generally distinguishes four categories of market failures, namely: externalities, public goods, natural monopoly and information asymmetries. The present paper will focused on information asymmetries both from the point of view of generating causes and the effects involved on the consumers, and from the point of view of the possible solutions for rectifying them.

Keywords: market failure; consumer; information asymmetries (search for similar items in EconPapers)
JEL-codes: D11 D49 D82 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (1)

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