Information Asymmetry: When Markets Fail

Christoph E. Mandl ()
Additional contact information
Christoph E. Mandl: University of Vienna

Chapter Chapter 18 in Managing Complexity in Social Systems, 2023, pp 183-188 from Springer

Abstract: Abstract What happens in a market when buyers expect a certain product quality only to find out after the purchase that the sellers misinformed them? This question is first addressed in the context of used cars. However, this dynamicDynamics is not confined to the used car market but may emerge in any market with asymmetrical information. The most disastrous example in this century is the financial crisisFinancial crisis of 2007–2008. In markets with asymmetrical informationAsymmetrical information and delay, some sellers may be tempted to sell an inferior product until the market collapsesMarket collapse. If potential buyers react strongly when it becomes evident that some products are of poor quality, then even one sellerSellers may cause a market to collapseCollapse.

Date: 2023
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:mgmchp:978-3-031-30222-0_18

Ordering information: This item can be ordered from
http://www.springer.com/9783031302220

DOI: 10.1007/978-3-031-30222-0_18

Access Statistics for this chapter

More chapters in Management for Professionals from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().