Glamor Economics

Chapter 29

Chapter 5 How to Make the Best Choices in Life—Information and Decision Making
Section 1 Inevitable Decision-Making Blind Spot——Information Asymmetry
A restaurant put up a sign: "No money for dinner tomorrow!"

The next day, the restaurant was full of diners, full of guests and friends, and it was very lively.When everyone was ready to leave after drinking and eating, the owner of the shop appeared and said, "Please don't forget to pay the bill."

Everyone was puzzled and asked the shopkeeper why he didn't keep his promise. The shopkeeper said: "It is written in the notice that you don't need money for dinner tomorrow, and it's not today."

This joke reflects that we often encounter some "tender traps" in our daily life, which make us deeply trapped and helpless.

Mr. Li bought a large pack of instant noodles of a certain brand in a supermarket.When he got home, he discovered that one of the packs had won fourth prize in the company's "Big Bone Winners" promotion.According to the reward content, he can get another half pack of instant noodles.

Therefore, Mr. Li went to the supermarket to exchange according to the prompt "Go to the place where you buy to get the winning instant noodles" displayed on the lottery ticket.The staff said that the award needs to be used together with two lottery coupons in order to exchange for a small pack of instant noodles.

"I don't think it's right. How can half a package of food be awarded? I think that if you win a fourth prize in a five-pack, you should reward half of the five-pack, that is, 2 or 3 small packages."

Facing Mr. Li who insisted on accepting the award, the store found a pack of instant noodles, broke out half a pack, and handed it to him.

"How do you eat this kind of instant noodles? Isn't that insulting?" In a rage, Mr. Li threw the whole pack of instant noodles on the ground.Subsequently, the two sides clashed.In the end, at the request of the store, Mr. Li compensated the price of the other half pack of instant noodles.

Mr. Li believes that the manufacturer's award setting is very unreasonable. "How can you set a half-pack award that you can't receive for food. If you win a half-bottle of mineral water, how do you get it?"

The staff of the company's marketing department said that there is indeed such a "half package award" award setting.It has two prize redemption methods, you can collect two coupons to exchange for a whole pack of prizes, or pay half the price to exchange for a whole pack of prizes.In addition, it is also marked on the redemption ticket that "the final interpretation right of this event belongs to the company".

We are no strangers to what happened to Mr. Li in the above case. As the saying goes, "From Nanjing to Beijing, buyers are not as good as sellers." information asymmetry.

An important assumption in classical economics is the complete information assumption, that is, it is assumed that every participant in the market knows all the information about the commodity.This is not the case in real life. We have been living in a world with asymmetric information.In the real economy, information asymmetry is very common.We know that "everyday parity and consistent" is Wal-Mart's marketing strategy for galloping in the global retail field, and it is also the core magic weapon for Wal-Mart's successful operation. Is there such a thing as buying a product for 10 yuan and selling it for 8 yuan?In fact, it is impossible for a store to discount everything like this.What we can notice is that only some products are so discounted, and they are discounted in rotation.This time it's a discount on drinks, the next time it's a discount on clothes, and maybe a discount on daily necessities.The prices of other commodities are no different from those of other supermarkets. This is the real Wal-Mart marketing situation.

When going to a Wal-Mart supermarket, it is impossible for a consumer to know what products are on sale. When he comes to Wal-Mart, he cannot only buy the discounted products he expects, and he may also buy other products.In economic life, the commodity information mastered by consumers is often incomplete.

Information asymmetry raises the possibility that one party with more information can deceive the other party.Information asymmetry between the government and the public will cause administrative power to lose supervision and breed government corruption; information asymmetry between business principals and agents will lead to opportunistic behavior; information asymmetry in the labor market will harm employers and job seekers; The information asymmetry among them is the root cause of the loss of integrity...

Under the conditions of incomplete and asymmetric information, complete rationality transforms into bounded rationality, that is, economic individuals are selfish and act according to the principle of maximization, but they usually do not have the information needed to make optimal decisions.Therefore, the ability of economic individuals is limited, and rationality is also limited.

Many economically developed countries in the world regard the possession, development and utilization of information resources as a basic national policy, and the development and utilization of information resources are very popular.Employment in the information industry accounts for more than 50% of total employment in the United States and the European Community, and close to 50% in Australia and Japan.

[links to related words]

Incomplete information In economics, information asymmetry is one of the phenomena of incomplete information.Incomplete information means that the information obtained or mastered by relevant market entities is insufficient to enable market entities to make rational judgments or decisions.Incomplete information not only refers to the incompleteness in the absolute sense, that is, due to the limitation of cognitive ability, it is impossible for people to know any situation that occurs at any time and anywhere, but also incompleteness in the relative sense, that is, information asymmetry .

The information consulting industry is a rapidly developing emerging industry in my country. In addition to management consulting, information, technology, investment, decision-making, market research, professional affairs, psychological consulting, etc. are also covered in the scope of the consulting industry. With the development of the economic field With continuous expansion, industry consulting such as engineering, value evaluation, and human resources has also shown an obvious growth trend.

The demand for information consultation is mainly caused by market competition and information asymmetry.With the development of the market economy, my country's information consulting system will be gradually standardized.

(End of this chapter)