Which of the following is most likely to be characterized by substantial asymmetric information?
A)a soft drink purchased in a vending machine
B)a car wash to benefit the local high school band
C)a collectible baseball card purchased on eBay
D)wireless service that includes unlimited minutes and texting

Question

Which of the following is most likely to be characterized by substantial asymmetric information?
A)​a soft drink purchased in a vending machine
B)​a car wash to benefit the local high school band
C)​a collectible baseball card purchased on eBay
D)​wireless service that includes unlimited minutes and texting

Quizplus · Accepted Answer

The collectible baseball card purchased on eBay is most likely to be characterized by substantial asymmetric information as the seller may have more information about the true value, rarity, and condition of the card than the buyer. The buyer may not have access to this information, which could lead to adverse selection or moral hazard problems. The other options are less likely to involve substantial asymmetric information as the relevant information is more readily available to both the buyer and seller.

Which of the Following Is Most Likely to Be Characterized