Dating Market Failure 2 — asymmetric information

Yesterday, I spoke about the dating market's failure and why things seem harder than they ever have been!

The second point of market failure is known as asymmetric information.

Let’s say you’re looking to buy a second-hand car. You go online and find almost immediately what appears to be a very alluring deal. The car is only a few years old, has low miles, and is well under the market price. So you do the obvious thing and arrange to meet the seller and buy it. This is a deal you gotta grab!

You eventually buy the car and are very happy; for the next three months, everything is smooth. That is until suddenly a bunch of problems starts arising with the car. The gearbox had to be replaced, as did the clutch. You’ve got them both repaired straight away. At this point, since you’ve been frustrated twice, you made the wise decision to get an inspection from a car mechanic in order to prevent any more unforeseen damages.