Which of the following is the least likely example of asymmetric information?
A) an insurance company and a client who just obtained a driver license
B) a seller of used cars and a prospective customer
C) a seller of fresh fruit and a buyer
D) a retailer of music CDs and a buyer

Question

Quizplus · Accepted Answer

In this scenario, it is unlikely that there is significant asymmetric information. Both the buyer and seller likely have access to the same information about the product (music CD) being sold, such as the album title and artist. In contrast, options A, B, and C involve situations where one party likely has more information than the other, such as the insurance company having more information about the risk of insuring a new driver compared to the client who just obtained their license.

Which of the Following Is the Least Likely Example of Asymmetric