The Power of Information

             I thought information asymmetry was one of the most interesting topics in Freakonomics. I have the term "knowledge is power" many times before but I never thought too much about it. However, after reading about the power knowledge gave real estate agents or business men I understood why people say it so often. 

            People are often afraid to sell their homes themselves because they are afraid of pricing it too high or too low. They believe that real estate agents will help them sell it for as much as possible. However real estate agents often manipulate information. One of the most interesting facts I saw was that when real estate agents are selling their own homes they will keep their houses 10 days longer and usually make $10,000 more than when they are selling someone else's house. A few studies have actually shown that using a real estate agent to help sell your home will not actually lead to higher average selling prices

           

            When someone has more information they typically have more power. Businessmen can use information to disguise debt or manipulate their profits. They can also trade information about the stock market. This has led to many scandals within large corporations over the past decade. 

            

             Until reading this chapter of Freakonomics I had not thought about how powerful information really was. Having more information will usually give someone more control and can be used in both positive and negative ways.