When reading Freakonomics, I came across several controversial topics. One of
the many topics that really stood out to me was the abuse of information. As I
read this section of the book located within the chapter titled “The Ku Klux
Klan and Real – Estate Agents,” I found that people with more information often
use it to their advantage, at the expense of those with less information. As the book says, “Information is a beacon, a
cudgel, an olive branch, a deterrent, depending on who wields it and how,”
(Levitt and Dubner, 67.) This quote basically sums up the two sides of
information: it can either be a very worthwhile source or a dangerous weapon
that can be used against someone.
The parlance used to describe the
deprivation of information from one party due to another party abusing their
privilege of said material is called information asymmetry. A specific
definition of the phrase ‘information asymmetry’ is that someone, typically an
expert, knows more about something than a consumer, thus gaining an advantage.
This is a very corrupt system, for the expert typically has their own best
interest in mind rather than being truly dedicated to assisting the consumer in
the best way possible. I also came
across a crime involving experts who promote false information, and hide the
material that the consumer needs. As the authors of Freakonomics put it, they
“…were trying to keep the information asymmetry as asymmetrical as possible”
(Levitt and Dubner, 69.)
The dishonest system of information
asymmetry has, however, been curtailed by the Internet. The internet provides
consumers with the ability to research and increase their own knowledge rather
than relying on somebody else. I am completely against information asymmetry. I
believe that it is unfair for an expert to deprive a consumer of help and
information. How are people supposed to do anything in this world if they
cannot trust people to help them in situations, whether it be purchasing a car
or selling a house? One of the key facts about information asymmetry and the
promotion of false information is the fact that it rarely is detected, thus
leading to the fact that it is rarely punished. The idea just confound s me,
and I believe that Dubner and Levitt decided to discuss the topic to show how
greedy some people can be with specifics and also to show how the information
can be easily gained through the use of the internet.
Alanna, i thoroughly agree with you on your perspective of Information Asymmetry. Businessmen or salesmen are a perfect example in this situation. As you said, they could be selling a car ,or another type of utility, giving the customer the false information. For example, a used car salesmen could say that the car has a good motor and a good running transmission, when the truth is they give you a run down car that has no use at all. But this was a great analysis, good job!
ReplyDeleteFirst, I agree with your statement about how is anyone supposed to get anything done if they can't trust the experts of the respective field. That being said, it was smart of you to mention how many consumers these days can circumnavigate the trust barrier via the internet. As I was reading your point about how online information is changing the need for experts (it is much easier these days for someone to independently buy or sell a house these days than it was prior to the internet's rise in popularity), I was reminded of a question I asked myself as I was reading the book, how serious can this problem be if the internet has all the information a buyer needs.
ReplyDeleteSecond, Chris, you make a good point about how used car salesmen are likely to tell sometimes huge lies just to get a lemon of a car off the lot. Fortunately, there are individuals out there who want to see people get good cars for their money so car fax has been introduced to ensure what the dealer is saying has to be true. That being said, there is still no shortage of ignorant buyers who won't bother to ask for the car fax.