Asymmetric information and uncertainty:
A)are key for the understanding of the firm as an organization.
B)are important aspects in the neoclassical approach of the firm.
C)are not as prevalent today compared to a few decades ago.
D)indicate that transaction costs are not significant.

Question

Quizplus · Accepted Answer

Asymmetric information and uncertainty are key for the understanding of the firm as an organization because they affect decision-making processes, risk assessment, and coordination among agents. The neoclassical approach also considers these aspects, but they are particularly relevant for the analysis of internal organization and governance structures. Asymmetric information and uncertainty are still prevalent today, especially in complex and dynamic markets, and they imply transaction costs that need to be managed by the firm.

Asymmetric Information and Uncertainty