ARBUS202 Lecture Notes - Lecture 6: Sentimentality
4 Mar 2016
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Baby milk laced with melamine (effect: organ failure-lethal) The purchaser of goods must take care to ensure that they are free of toxic or unwanted elements - Information, specifics, details, opportunity to examine it, comparatives, choice, word of mouth. With caveat emptor, the purchaser assumes the risk that the product might be either defective or unsuitable to his/her needs. Sellers cannot: act fraudulently act in bad faith. Information: this is against this backdrop that consumers ae expected to examine, judge, and test. Buyers need all the info they can get in order to make an informed decision. Sellers will want to control the info that the buyer gets. Information is either: symmetrical (each player has the same info and they know this) or asymmetrical (one player has more information than the other) Asymmetric information can lead to huge problems (ex. princess bride iocane powder) So how comfortable are you with this type of corporate information gathering?)
