Information is a mathematical concept, it can not reflect the distribution of knowledge in a given human population. Quantitative information-processing, like the flowing mass of monetary streams to asset accumulation, which is an asymmetric signal of economic crisis, deals with post mortems of data and cannot cure the pathology. 'Asymmetries of information' are mathematical indicators that we can use to detect the real economic malady behind the data.

You only have self-experience as direct information accepting that self-experience is not based on an illusion/hallucination. Because you cannot be everywhere you can do not more than believing what others claim? In these conditions, what criterion can be used to believe individual A for X % and believe individual B for Y%? I don't think that in these conditions asymmetries of information can be reliably estimated

Perhaps 'asymmetry of information' should be replaced by an approach based on 'asymmetry in believing what other people claim'? Information is here defined as an interpretation of what is perceived by a receiver, and therefore can only be individual-specific.

Thanks for sharing this interesting question to me. I'm not a specialist in the field of this question but have found the question interesting and browsed the explanation at the following link to study a little about "information asymmetry":

https://en.wikipedia.org/wiki/Information_asymmetry

The Economist explains economics: What is information asymmetry?

MARKETS frequently present consumers with products whose quality is difficult to judge in advance. A television, for instance, might look good in the shop, but for how long will it work? Warranties are one way of overcoming the uncertainty. Big brands offering staid but standardised products are another; the hipsterish coffee shop may well have the best brew, but the neighbouring Starbucks hopes you are unwilling to take a risk finding out. Yet despite the pervasiveness of the problem, and of solutions to it, not until the 1970s did economists begin to incorporate “asymmetric information” into their thinking...

George Akerlof, your colleague, was at the forefront of this effort. In his seminal 1970 paper “The Market for Lemons”, Mr Akerlof asked what would happen to the market for used cars if buyers could not tell between good and bad...

Peter Spence, another pioneer of information economics, focused on “signalling”. His example was the labour market...

Information asymmetry remains a tricky problem for policymakers. Adverse selection is plaguing America’s Affordable Care Act, better known as “Obamacare”...

https://www.economist.com/blogs/economist-explains/2016/09/economist-explains-economics-1

“..asymmetric information, market economies perform poorly; and presumably, the greater the asymmetries, the worse the performance..” I could say the greater the asymmetries the max the income for the capital.

“Asymmetric information” looks as the diet cola or a black coffee accorded with a pancake full stack to justify diet. That was my first image in USA attending a meeting at the breakfast time. Asymmetric information is to sale a small mirror to Indians and buy gold when conquering the South Americas, or create a bankruptcy situation to sale FMI technological and financial expertise so to buy for a cent the wealth of the targeted countries.  “Asymmetric information” is the basis of the Capitalism.

Simple Simulation Test of Asymmetry in Believing Something:

You claim that there is a white ball in this bag. Do you believe me: Yes or No?

You provide additional information about your education background/ profession/ lifestyle/ origin/ etc... X.

You present the claim and your profile to 1000 people. It is highly likely that not all the people will believe you that there is indeed a white bal in the bag

Will the proportion of the people that believe the claim that there is indeed a white ball in the bag differ according to the additional information you provide about your education back ground/ profession /lifestyle /origin/ etc... X?

Then you show the content of the bag demonstrating to the 1000 people that the ball is black, not white.... 

And then you ask the 1000 people: Why did you believe that the ball in the bag must have been white? What are the underlying mechanisms of interpretations of what is claimed by others?

Etc....

The information profile that provided the highest proportion of Yes to the claim that there is a white ball in the bag could perhaps be used in the development of marketing strategies? 

" They knew that information wasn't perfect, but hoped that a world with moderate imperfections of information would be akin to a world with perfect information. We showed that this notion was ill-founded: even small imperfections of information could have profound effects on how the economy behaved ". This is where the crux of the matter lies. Decisions are the main actions we make to lead our daily living, and these decisions we make are based on information we have as knowledge or as new imagined ones that we think are good enough.

Economies as we see it today are among the chaotic dynamical systems that are present in human society, with main locomotive engine of information. The very nature of a chaos is that it is small change sensitive on one or more of the parameters it functions up on, i.e., a small change on the parameter(s) will bring a huge change on the behavior of the system.That is what we see on wall street, and that was what happened in the 2008 economic collapse which will happen again in the short future (I assume). This is because what the Nobel prize winners termed as "asymmetric information" in a very open term is  lies, deception and feeding false information to rise markets and collect huge sums of money which caused the market to fail.

I think the Noble committee is deceived by the buzz words they coined, instead of simply saying lies, dishonesty and deception. It sounds like the former economist in a different hat of magic. Since 2008 until the economy gets ground from huge government help, no economist came out and said, what the cause of the collapse was and what will be the remedy for it. Still the market continues behaving the way the temperature of the local or global society behaves (chaotic in nature). "Alternative Truth" buzz words for "lies" as asymmetric of information for dishonesty and lying. 

We do I've nowadays in a fantastic world, full of data, information and knowledge. The information society and the knowledge society are not just words. Our age is one of lights and insight, indeed.

However, as it happens, the asymmetry of information is huge and increasingly. This is, I would say, the main economical and political trouble in our times.

The basis of society (...) remains still far behind spearhead information. This is why they are being easy manipulated with pessimism, troubles, and insatisfaction. The truth is that "down there" there is much vitality in knowledge and research. The main hurdle, though, is that the majority of society remains ignorant of such a vitality.

One of the most compelling task of scholars and researchers consists in bringing out that vitality of knowledge up to the surface - if the expression is allowed.

Our friend Callaway has ponte dour to a most sensitive issue, here, indeed.

One of the major problem of this “asymmetric information” is also this and related Nobel Prize. "We need to filter" information. Why?  Who is going to filter a Nobel Prize?

Information covers the 90% of our time. The 99.0% of this information is meaningless. On birth, we are considered to be part of a type of “autocrine” social system, pursuing this game of information, which is just business.  This is called materializing ethics; we are convinced that WE shape our environment but in fact we participate in the shaping of an environment which is not ours and, thus, we are shaped by this environment.  Joseph Stiglitz, Columbia, Berkeley are used as shaping manifolds. The battle will be to regain humanitarian properties. We need to reject this “axiom” that we are just simple object of a “virtual construction”. To regain humanitarian properties, we need to reposition Science as a tool that works for the humanity and not for the capital.

My proposition for next Nobel Prize, will not be “Assymetric information” but “ChoroEconomy”. The “Choros” belongs to the citizens past, present and future and dominates the shaping properties of virtual manifolds. 

Dear Callaway;

This is a very good point for me.

"asymmetry of information"

It is also related with my research subjects and questions and also related with the following ones.

https://www.researchgate.net/post/Whats_the_difference_between_psychological_warfare_and_propoganda

https://www.researchgate.net/post/What_is_your_opinion_on_political_marketing_Any_similarities_with_psychological_warfare

https://www.researchgate.net/post/How_should_wars_be_studied_and_presented_in_the_scientific_research_studies

How can we measure "asymmetry of information" and its effects in demand and supply and also in real life?

During my decision making models I assign weights for the differences of expertise and knowledge. But this is not directly related with your point.

I can not give an answer to you yet supporting with a publication. 

I will search. If I can have a publication and literature review I will give my clear answer here.

 "asymmetry" term is also used in many other subjects in the same or similar manners.

Have a nice day

Best Regards

The fact that information is almost never complete, or that all of the factors can not be known to a significant degree, just shows the importance of developing an error factor for any market or event.

Dear Callaway:

I would say that asymmetries of information exist to some degree in every market, but the level of asymmetry varies greatly among different markets and countries. I think that in historically troubled economies, like the one we have in Argentina, the asymmetry is usually huge. A few key economic and political actors have continually used it to their advantage and produced enormous income transfers in extremely short periods of crisis (inflation, currency crisis, fiscal crisis, etc.) I don't know if there have been developed some indicators of asymmetry of information, but I wouldn't be surprised if they are correlated with perceived corruption. 

Mainz, Germany

Dear Jorg & readers,

I think you raise some important issues. Of special importance is that the asymmetries are not constant but instead change from time to time and from place to place. That suggests the corresponding question of whether they are increasing in a given context of exchange. Of course, it is of interest that we live in a time of the mass collection of information.

You wrote:

I think that in historically troubled economies, like the one we have in Argentina, the asymmetry is usually huge. A few key economic and political actors have continually used it to their advantage and produced enormous income transfers in extremely short periods of crisis (inflation, currency crisis, fiscal crisis, etc.) I don't know if there have been developed some indicators of asymmetry of information, but I wouldn't be surprised if they are correlated with perceived corruption. 

---End quotation

I came across a short synopsis of the economics of information asymmetry (from 2003) at the following link:

http://siteresources.worldbank.org/DEC/Resources/84797-1114437274304/Asymmetric_Info_Sep2003.pdf

This may be helpful in gaining an overview of how the economists view the matter.

However, your pointing in the direction of the perception of crisis and corruption seems important here. 

I have often thought about the following kind of situation. Suppose you have two grocery stores on opposing corners of an intersection --which are both doing fairly well. As "principles" they each select an internet service provider (as "agent")  to conduct their business transactions with wholesalers, creditors, banks, suppliers, etc. The ISPs are thus the agents of the respective grocer-principles. However, it turns out that an employee of the one ISP is in league with the other grocer, and passes on sensitive information concerning, say, the timing of payments and other sensitive transactions to the competitor. This creates an asymmetry of information in the competition between the two grocers. The better informed grocer might, for instance, put on a sale and cut prices tactically, just when (as he knows) a large payment is due from the other and the other is short on funds.--with the prospect of driving the competition into greater financial difficulties. If the less informed grocer can be driven out then the better informed grocer may, then, subsequently raise prices generally and get away with it. As Kausel remarks, directly above, this might be generalized in terms of the phenomenon of "insider trading."

My idea here might be considered a small-scale version of the kind of crisis you mention. My reflection connects directly to the problem of corruption.

I hope that readers may benefit from the linked analysis--which includes mention of the principle-agent problem and its relation to moral hazard.

H.G. Callaway

Almost all economic transactions involve information asymmetries.

Asymmetric information, sometimes referred to as information failure, is present whenever one party to an economic transaction possesses greater material knowledge than the other party. This normally manifests itself when the seller of a good or service has greater knowledge than the buyer, although the opposite is possible.

Growing asymmetrical information is a desirable outcome of a market economy. As workers specialize and become more productive in their fields of expertise, they can provide greater levels of value to workers in other fields. For example, a stockbroker’s services are less valuable to customers who already know enough to buy and sell their own stocks with confidence.

One alternative to ever-expanding asymmetric information is for workers to study in all fields, rather than specializing in those fields where they can provide the most value. This comes with large opportunity costs and would likely result in a lower level of aggregate output, lowering standards of living.

Another alternative is to make information abundantly and cheaply available, such as through the internet. This does not replace asymmetric information, however. It only has the effect of moving information asymmetries away from simpler areas and into more complex areas.

http://www.investopedia.com/terms/a/asymmetricinformation.asp

Mainz, Germany

Dear Kundu,

I did come across the material you quote from "investopedia," but this strikes me as a rather narrow perspective on the question--in contrast to that of the academic economists. If you are a prospective investor, surely, it is better to know more about the prospective investment. No surprise there. In fact, though, the assemblers of big data may know more that the investment specialists.

H.G. Callaway

The  «information asymmetry" remains a problem for scientific too.

We do I’ve in a world, full of information (data, experiences, conferences, books …), and our knowledge about one little factor may be in the results perfect, but also asymmetric … It is evident , that our society is to share in specialists …

Why it is important to know that information is almost never complete ? - The scientifical data are constantly changing and it is very optimistic. You must partially guess and do the summaries, which can be changed in certain time.

Mainz, Germany

Dear Jorg & readers,

I think you raise some important issues. Of special importance is that the asymmetries are not constant but instead change from time to time and from place to place. That suggests the corresponding question of whether they are increasing in a given context of exchange. Of course, it is of interest that we live in a time of the mass collection of information.

You wrote:

I think that in historically troubled economies, like the one we have in Argentina, the asymmetry is usually huge. A few key economic and political actors have continually used it to their advantage and produced enormous income transfers in extremely short periods of crisis (inflation, currency crisis, fiscal crisis, etc.) I don't know if there have been developed some indicators of asymmetry of information, but I wouldn't be surprised if they are correlated with perceived corruption. 

---End quotation

I came across a short synopsis of the economics of information asymmetry (from 2003) at the following link:

http://siteresources.worldbank.org/DEC/Resources/84797-1114437274304/Asymmetric_Info_Sep2003.pdf

This may be helpful in gaining an overview of how the economists view the matter.

However, your pointing in the direction of the perception of crisis and corruption seems important here. 

I have often thought about the following kind of situation. Suppose you have two grocery stores on opposing corners of an intersection --which are both doing fairly well. As "principles" they each select an internet service provider (as "agent")  to conduct their business transactions with wholesalers, creditors, banks, suppliers, etc. The ISPs are thus the agents of the respective grocer-principles. However, it turns out that an employee of the one ISP is in league with the other grocer, and passes on sensitive information concerning, say, the timing of payments and other sensitive transactions to the competitor. This creates an asymmetry of information in the competition between the two grocers. The better informed grocer might, for instance, put on a sale and cut prices tactically, just when (as he knows) a large payment is due from the other and the other is short on funds.--with the prospect of driving the competition into greater financial difficulties. If the less informed grocer can be driven out then the better informed grocer may, then, subsequently raise prices generally and get away with it. As Kausel remarks, directly above, this might be generalized in terms of the phenomenon of "insider trading."

My idea here might be considered a small-scale version of the kind of crisis you mention. My reflection connects directly to the problem of corruption.

I hope that readers may benefit from the linked analysis--which includes mention of the principle-agent problem and its relation to moral hazard.

H.G. Callaway

Thanks for sharing. I agree somehow with Artur. In a scientific plan, the asymmetry may be based mostly in the capacity for understanding the scientific contents, or asymmetry of knowledge background, which may lead wrongly to a deviant political control attempt and/or dominance of very different types.

See the link

http://www.sciencedirect.com/science/article/pii/S1471772714000281

I have to believe that there's nothing new in the concept of "asymmetries of information," but there is something intriguing about the big effects even small lapses in knowledge might have on the economy. The economy, according to this thesis, is very sensitive to small variations of input variables? That's very interesting.

Then again, there's a reason why multiple different political parties and ideologies seem to appeal to different people. It's possible that they are all right and also all wrong. They simply consider only a limited number of input variables, and each ideology has its favorite input variables to include, and those to ignore. People have sworn by all manner of economic theories for centuries. Some even sound all warm and friendly, and who could possibly disagree with them.

We see this phenomenon in action all the time. Here's one US-specific example from the last administration. In promoting the Affordable Care Act (Obamacare), the public was led to believe that if everyone has health insurance, everyone will take better care of themselves, and consequently, health care costs, in the aggregate, would go down.

That might sound catchy, but it takes an enormous leap of faith. In fact, the opposite could be true. It's a bit like proclaiming that if you wash your car every week, it will last longer and cost less over time. That is also a truism. In fact, it may last no longer, or even less long, and it will almost certainly cost more over its lifespan. There are many variables involved, and they could sway the cost equation one way or the other. If poorer people frequently drive clunkers, the actual cost model is much more likely to be that the lowest costs are achieved if one only worries about keeping the most basic of drivetrain components functional, and certainly forget about cosmetics. Then again, if you live in upstate New York, who knows, washing frequently may have a positive impact on longevity of said car. And even that isn't necessarily so. Washing frequently, and then parking in a warm, moist garage, may work the opposite way!

I also have to believe that in politics/economics, too often, perhaps always, "asymmetries of information" are intentional. Politicians do not need to worry about long term truths. Only about the next election. They hope for asymmetries of information, so that the voting public will believe in their fairy tales.

Banal example: "We will increase the minimum wage, giving the lowest wage earners a pay raise." That's so overly simplistic, on so many levels, that it can't be taken seriously. But few politicians would attempt to explain the fine points, the caveats, or otherwise explain the multiple nuances of such a policy. Even if they have more information that might make a big difference.

Quy-Toan Do -The World Bank: "Asymmetric information, as the adjective indicates, refers to situations, in which some agent in a trade possesses information while other agents involved in the same trade do not. This rather self-evident premise has nevertheless revolutionized modern economic thought since the 1970s. Take, for example, two major results in the economics and finance literature, the first fundamental theorem of welfare economics and the Modigliani-Miller theorem. The first welfare theorem states that in a competitive economy with no externalities, prices would adjust so that the allocation of resources would be optimal in the Pareto sense.1 A key assumption for the theorem to hold is that the characteristics of all products traded on the market should be equally observed by all agents. When such assumption fails to hold, i.e. when information is asymmetric, prices are distorted and do not achieve optimality in the allocation of resources. Standard government interventions such as regulation of monopolies to replicate a competitive environment, or fiscal policy to alleviate the effects of externalities, are no more sufficient to restore optimality. Similarly, in the finance literature, the Modigliani-Miller theorem concluded that the value of a firm is independent of its financial structure. The acknowledgment of asymmetric information within organizations shifted the debate on optimal financial structure from fiscal considerations, to the provision of incentives to align the interests of managers and workers with the interests of stakeholders".

http://siteresources.worldbank.org/DEC/Resources/84797-1114437274304/Asymmetric_Info_Sep2003.pdf

Mainz, Germany

Dear Al-Adwan & readers,

It is, of course, imaginable that various people would favor growing asymmetric information --for purposes of individual or collective gain. Getting at that sort of question may be generally of interest.

I find it curious, though, that you quote from Quy-Toan Do's technical account of the matter --already noted and linked in my note above --without adding anything yourself.

What do you wish to say about the question? Are there particular "stakeholders" who call for attention at this point?

H.G. Callaway

Even perfect symmetry of information rarely solves the equation. Real estate appraisals are premised on a buyer and seller in the marketplace, neither with a compulsion to buy or sell and both equally knowledgeable about the property and the market (condensed). When I acquired property for the Nevada Department of Transportation, we always hired two appraisers, equally trained and skilled with equal access to the property and the market, each applying the same standard. The usual result was that one or the other would come in significantly higher than the other, sometimes double or more. Another question to ask is: what does symmetry of information do for you? Assuming that we all have access to the same information regarding the larger national and world economies, can anyone judge among all the market cheerleaders and doomsayers (50/50) or otherwise tell me how, when and where to invest? As to individual assets, insiders, of course, cannot be matched, though even they frequently err.

Another example: During WWII, German scientists were not outsmarted by those in the U.S. (viz. Heisenberg v. Oppenheimer), but they had neither the desire nor the resources to build a bomb. Of course, they were also outnumbered by all those who fled Europe and worked to defeat them.

There's a whole lot more to predicting outcomes than symmetry or asymmetry of information. It is my observation that people who are rich have usually pursued the goal of being rich with dogged compulsion, to the exclusion of other goals or values - they just wanted it more than the rest of us; and the suitor who gets the girl is frequently the one who wanted her the most. Motivation, resources and even scruples rule the world as much as information.

Symmetry of information is likely more attainable today than at any other time in human history, but our world has also never been as complex as it is today; and resources have never been so asymmetrically apportioned.

HG, here's another perfect (in my opinion) example, since Charles brings up real estate.

Back in the mid 2000s, there was a narrative in the US Congress that home ownership makes for, or "creates," responsible citizens. Remember those days? So, lending institutions were encouraged to bend over backwards, to make home loans available to everyone. The federal government even guaranteed certain home loans. Which means, the US taxpayer was made to be responsible for risky loans.

The question should have been, does home ownership create responsible citizens, or do responsible citizens make good homeowners? Anyway, if the truth of this narrative should be in question, perhaps this article can remind readers of those days:

http://rismedia.com/2007/10/04/pelosi-subprime-crisis-demands-action-congress-will-protect-families-who-have-lost-their-homes/#close

Everyone knows what happened at that time. The US home mortgage crisis created a huge recession, which spread throughout the world. Many put the blame on the lending institutions, fair enough, but it was the political climate that pushed this sad state of affairs. If the federal government guarantees risky loans, just how "risky" should we allow? That too is a fair question, after all?

As highly leveraged as the home loan industry is, it only took a relatively small percentage of defaults to cause a collapse.

That's asymmetry of information, completely intentional, or perhaps one should say the result of cluelessness, for the purpose of political gain. Sometimes, the less-than-quantitatively-inclined are apt to think that mere nice-sounding words are enough to create a truth. But they are not.

Mainz, Germany

Dear Diogo & Readers,

My own academic experience points to a phenomenon of "insider trading." Too many people simply do not focus on the issue at hand, but instead are more intent with ingratiating themselves with various institutional power-that-be --which is to say the people who, at a given time, have more power over appointments and academic opportunities generally.

Often, there is a failure of imagination, and people cannot even imagine any alternative to such a system. In the extreme, this produces a class system, since those with a better knowledge of the insider workings and personalities have a very large advantage over any competitor who lacks such insider lore. Positions and opportunities may even come to be passed down within families--nepotism. Although nepotism is illegal in most countries, it continues to exist in spite of that, since the insiders are so thoroughly protected by nods and winks exchanged with other insiders. The insider networks, through favoritism, distort the course of inquiry whenever it touches on their entrenched interests. The strong influence of polemical "gate-keepers" is a pretty sure sign of this phenomenon.

I recall distinctly, on one occasion, recommending a book to a graduate student of my acquaintance who was doing a dissertation on a topic that interested me. I had read the book, and knew it was a good treatment of the subject. Instead of taking the advice seriously, the graduate student simply paged through the bibliography and disregarded the book. In that context, that was a pretty clear sign that the student was more interested in the potential relations to particular academics--not in the subject-matter as such. Particular people, in view of institutional power (and often enough, political connections) are treated as "owning" a subject matter --which has the effect of closing down open criticism and the promotion of alternative points of views. Knowledge of insider relations is privileged, controlled and decisive, while knowledge of the subject matter is discounted.

Its interesting to discover, on occasion, who is privy to the insider gossip. It tells us much about the associated attitudes and relations.

H.G. Callaway

Thanks for sharing your valuable experience, Dear Callaway.

However, I do not see any direct relation with my answer. Probably you did not understand my answer, and my courtesy, but that is not my problem and I will not elaborate more on it.

Good luck

Mainz, Germany

Dear Diogo,

Perhaps I should mention that part of my academic experience came in the form of a visit to your own University of Coimbra. I was invited to give a paper at a conference and had my expenses paid. My wife and I very much enjoyed the visit, which included taking the train up from Lisbon.

You have a very beautiful country! I particularly enjoyed the fact that I could substantially get around using my Italian--with people answering in Portuguese. Lisbon is one of the very closest places in Europe to the U.S. East coast --only 6 hours away.

Thank you very much for your courtesy. Perhaps I have missed something? In any case, we should focus on the topic at hand --concerning information asymmetries.

H.G. Callaway

Dear Callaway: I do not like lies. In the context of your previous answer, can you please explain exactly what part of your academic experience so important did come in the form of a visit to University of Coimbra? What did you learned exactly there and with whom?

Dear Callaway,

You have put exactly the flesh and soul of functioning structures of the western societies in particular and of  contemporary societies. Academics do that in a more explicit manner. I live in the state of Virginia for more than ten years asking a mathematics faculty position in colleges and universities around where I live. The tragedy of it is not they denied me offering a position but they hire people through what you said insider routs, connectedness and networking. I am a citizen, pay taxes and I am qualified to get the opportunities the state and the country has to it's citizens. But that did not happen and is not happening, instead I and my family live in food stamps at times and the state is willing to do that, instead of questioning the rational why this person is not getting employment in these places, while they give them funds annually for third abuse of the power they have.

I invite to visit the mathematical website of one university, I constantly been rejected, Virginia Commonwealth University. Either full time or adjunct, they hire only Caucasians with no shame and guilt what so ever. What wrong thing could that be, if one person who is not a Caucasian is teaching what they teach? They even cancel classes because of shortages of instructors, while I live there begging for teaching. Look my profile and academic works and look the profiles of those people who are there and pass your own judgement. 

My question to you is , did I make a wrong decision when I decided to become an American, if America offers me such a look sided treatment? Are all people from across the globe misinformed about the slogan" America is a land of opportunity" but once they are here treated with people of substandard consiousnes ? If I am educated in the place which I assumed my country but denied any opportunity available on my education, what am I in that country?

As a learnt person of reason what do you think about America in general and particularly universities in America?  Do we need to come to terms what you have written or we have to expose such activities to society and to state governments ? I look forward to reading your says !

Dejenie 

---------------------------------

After my initial post, I decided to add the following as  testimonials:

A student in a small college where I teach as an adjunct wrote: " He teaches as if we are university students, ...",  "He loves what he is teaching, but ..." he has to "come down" to our level. I have good students evaluations in general even in places where I teach lower mathematics. 

Here is the recommendation letter from a colleague which I met here in RG, regarding my fit to be a good teacher of mathematics and researcher. 

It seems that under some circumstances, a well-run laboratory for example, or maybe a decision made between respected business partners, that asymmetry of information might be a rather straightforward consideration.  It is only when disinformation, distortion of facts or worse, and even distortion or changing of the topic being considered, that it gets to be so very messy. 

Hiring is an area where cliques - large and small - may often show favoritism.  The same may be true of acceptances for publication, and in life in general.  But all we can do (for the most part) is to try to avoid unfair practices on our own part, and perhaps point out individual cases for discussion when we see them.  - This is not to say that some class action may not be necessary, because it may.  But I mean to say that as individuals, we can watch our own behavior.  

@Artur, Do you know any good/prestigious club to adhere so to land a job and continue working on my science?  I need a good salary. Any good connective system?  

“Asymmetries of Information” relates to any system used to control the same system (auto-control).  It is in fact a property of “bourgeois/bourgeoisie”.

To my opinion, the song of Jacques Brel “Les Bourgeois” illustrates nicely this great innovation “Asymmetries of Information” and Nobel Prize.

“Les bourgeois c'est comme les cochons

Plus ça devient vieux plus ça devient bête

Les bourgeois c'est comme les cochons

Plus ça devient vieux plus ça devient c-

..

Entre notaires on passe le temps

Jojo parle de Voltaire

Et Pierre de Casanova

Et moi, moi qui suis resté le plus fier

Moi, moi je parle encore de moi … »

Mainz, Germany

Dear Lakew & Knaub,

I think that Knaub describes the general situation quite well--regarding insider trading on positions and opportunities. In any case, I think that there is no reason to take the typical mistreatment and disregard personally. It is rare that anyone in particular is excluded purposefully--rather than incidentally--to insider purposes. The problem has been made worse, however, by the administrative take over of the universities --and generally by the growing lack of self-restraint in academia. Opportunity becomes very much a matter of trading favors among insiders to the benefit of insiders. 

These trends may still eventually be reversed. The consequences of persisting in this style will make the universities ever more antagonistic to the public interest. The states must take the lead in curbing the self-flattering insider excesses. The public interest shows most evidently in terms of the failures of the universities to control tuition costs to students --but also in the prevalent restrictions on freedom of speech and the cult of multiculturalism.

H.G. Callaway

Mainz, Germany

Dear all,

Here is the full text containing the comment which Brown so helpfully quoted above:

Philadelphia, PA

Dear Hernandez-Lopez,

Thanks for your invitation to comment on this question. I though to contribute a quotation from Susan Haack, on academic hiring:

What drives academic hiring, she says, is not the merit and quality of candidates so much as the internal and “corrupt” politics of academicians. “The hiring process is too often less a straightforward if ill-informed and clumsily conducted effort to identify the best candidate than an unseemly struggle of greed and fear.”

She continues:

Greed: we want someone who will improve the standing of the department, who has contacts from which we might benefit, who will willingly do the teaching we’d rather not do, who will publish enough so the tenure process will go smoothly. Fear: we don’t want someone so brilliant or energetic that they make the rest of us look bad, or compete too successfully for raises and summer money, or who will vote with our enemy on controversial issues. We look, in short, for someone who “fits in.” (The foam-rubber PR term is “collegiality.”)

---End quotation

The quotation comes from Haack's book, Confessionals of a Passionate Moderate.

I wonder if this might provoke some comments or discussion. The requirement of "fitting in," is especially onerous in cases where there is pre-existing corruption, political favoritism, nepotism, insider trading, etc. Such people, we expect, want very much to cover their trails or past deeds. In the extreme, what is wanted is an accomplice. 

H.G. Callaway

Mainz, Germany

Dear all,

I've come across Joseph Stigliz ' Nobel Prize lecture:

http://www.nobelprize.org/nobel_prizes/economic-sciences/laureates/2001/stiglitz-lecture.pdf

Although this is a long piece, it may well prove useful to consult for those with a continuing interest in the present question and thread.

Much of the focus is on reworking accounts of micro-economic relationships and transactions. My sense of the matter, however, is that the deeper problems arise in situations in which asymmetries of information suddenly increase, or in which there is a long-term increase of relevant asymmetries.

Given some skeptical treatment of government and governmental regulation on Stigliz's part, when politicians are aware of growing asymmetries of information in particular markets, we may wonder about the incentives there may be for them to institute legal regulations in order to improve the market performance. Or, to put the point in more familiar terms, given their awareness of growing asymmetries of information, they may have an incentive to simply ride the roller-coaster for personal benefit. 

Stiglitz has suggested that reducing governmental secrecy may be an important route toward solution of related problems.

H.G. Callaway

H.G. -  Question: 

You noted that "...given their awareness of growing asymmetries of information, they may have an incentive to simply ride the roller-coaster for personal benefit."  Do you mean that, for example, a Congressman might, say, obtain stock in a firm cheaply, and then push a bill that would cause the stock value to increase?  Or do I misunderstand that part ?   Thanks.

Mainz, Germany

Dear Knaub,

I think that your suggestion is rather more unlikely. Too overt. But if you've got "friends in high places," then who needs stocks and bond?

What I was thinking of would be more along the lines of politicians cultivating the support of large-scale institutions, public or private. Agents of such institutions might be expected to first appear in the roles of lobbyists. But however the contacts begin, powerful institutions organize the economic interests of many; and we have tended, in recent decades, toward lending greater significance to large-scale institutions--everything from  elements of the military-industrial complex and the national security state, to great and growing firms, say, Wall Street or Silicon Valley, big pharma, Hollywood, media firms, etc. --down to to major universities, and local non-profits. There has also been a significant tendency of politicians to set up charities or non-profits in their own localities, secure government funding, and then, use these institutions as means to support their own political activities and political operators.

But to return more directly to our theme, if the politicians become aware of a growing asymmetry of information favoring such entities, then--rather than smoothing out the market framework, or leveling the economic playing field, there is some incentive for them to lend them support where this may be reciprocated by favoritism or campaign contributions, lobbying in support for particular legislative projects, etc. Instead of representing the public and its interests, they may, in this way come to represent much narrower institutional interest. I take it that would be a version of corporatism.

I wonder if you have seen the Introduction to my new book:

https://www.researchgate.net/publication/317741621_Pluralism_Pragmatism_and_American_Democracy_A_Minority_Report

Philosopher William James once said, in the midst of the Gilded Age, that he hated "everything big." Recall that back then, large firms would simply buy U.S. Senators, since they had so much influence on the state legislatures which elected them. That was a major reason for changing the constitution to provide for direct election of U.S. Senators.

H.G. Callaway

Book Pluralism, Pragmatism and American Democracy: A Minority Report

"I think that your suggestion is rather more unlikely. Too overt."  -  Actually that does happen.   Think Tom Price, and that did not even so much as sink his nomination.  Perhaps too commonplace.  (Martha Stewart notwithstanding.)  

However, I thank you for your clarification of your meaning.  

Here is H.G. Callaway answer to my question that was still missing in this discussion:

 “Dear Diogo,

In reference to your question, better to speak perhaps, of someone there as either "a knave or a fool" --to quote Shakespeare.

My sense of the matter is that my invitation was based on political prejudice and prejudgment. You might look to those favoring globalization and antagonistic to social forms congenial to the U.S. constitution. We nonetheless enjoyed the visit--and I turned down a subsequent invitation.

H.G. Callaway”                                           

Some persons have an attitude institutional, others not. Nevertheless we should never confuse persons with institutions what would be a very grave fault.

Perhaps the following Portuguese Proverbs may be applied here?

http://pt.bab.la/dicionario/portugues-ingles/n%C3%A3o-%C3%A9-com-vinagre-que-se-apanham-moscas

https://quemdisse.com.br/frase/vozes-de-burro-nao-chegam-aos-ceus/68783/

Mainz, Germany

Dear Diogo,

You got more of an answer than you deserved--apparently.

H.G. Callaway

Thanks. I agree. Remarkable intelligence and wisdom with respect to these subjects is/seems exclusively yours.

See the links

http://www.businessdictionary.com/definition/information-asymmetry.html

Article What asymmetry? Knowledge of self, knowledge of others, and ...

Mainz, Germany

Dear all,

It seems this question has proved itself controversial. But, after some delay to clarify matters, perhaps we can continue.

I thought to mention an article from the NY Times written by a man who quit the Wall Street investment bank, Goldman Sachs, on grounds of conscience, though he had been with the firm for 12 years and was making $1/2 million per year:

The author of the piece is Greg Smith, and I quote from his piece of 2012 explaining his resignation from the firm. He says of the firm:

What are three quick ways to become a leader? a) Execute on the firm’s “axes,” which is Goldman-speak for persuading your clients to invest in the stocks or other products that we are trying to get rid of because they are not seen as having a lot of potential profit. b) “Hunt Elephants.” In English: get your clients — some of whom are sophisticated, and some of whom aren’t — to trade whatever will bring the biggest profit to Goldman. Call me old-fashioned, but I don’t like selling my clients a product that is wrong for them. c) Find yourself sitting in a seat where your job is to trade any illiquid, opaque product with a three-letter acronym.

Today, many of these leaders display a Goldman Sachs culture quotient of exactly zero percent. I attend derivatives sales meetings where not one single minute is spent asking questions about how we can help clients. It’s purely about how we can make the most possible money off of them. If you were an alien from Mars and sat in on one of these meetings, you would believe that a client’s success or progress was not part of the thought process at all.

---End quotation

See: "Why I am Leaving Goldman Sachs"

http://www.nytimes.com/2012/03/14/opinion/why-i-am-leaving-goldman-sachs.html

Part of what is being said here is that the investment bank, one of the biggest such firms in the world, and which also has offices in London, has been selling highly sophisticated financial instruments and complex derivatives to clients who are sometimes incapable of understanding what it is they are buying. In effect, the claim is that the firm takes advantage of asymmetries of information to the disadvantage of its own customers. This suggests a certain lack of self-restraint.

See also the "60 Minuets"  interview from CBS news, available at the following address:

https://www.youtube.com/watch?v=LM2iVXAA770

This runs about 13 Min. Smith says that the related practices are a long-term danger to the reputation of the firm. But this is also a firm which has favored various politicians and paid them very large sums to speak. We may wonder if such politicians have adopted similar attitudes toward the electorate. 

H.G. Callaway

Hi Callaway

Some useful references on attachment 1

https://www.project-syndicate.org/commentary/asymmetries-of-information-and-economic-policy?barrier=accessreg

2

https://en.wikipedia.org/wiki/Information_asymmetry

3

http://www.nobelprize.org/nobel_prizes/economic-sciences/laureates/2001/stiglitz-lecture.pdf

4

http://siteresources.worldbank.org/DEC/Resources/84797-1114437274304/Asymmetric_Info_Sep2003.pdf

5

https://is.esade.edu/faculty/.../Asymmetric%20Information%20&%20Market%20Failure.doc

6

https://www.econlib.org/library/Enc/bios/Stiglitz.html

7

https://www.oecd.org/site/progresskorea/43733640.pdf

8

https://www.independent.org/pdf/tir/tir_01_2_shmanske.pdf

9

https://www.economist.com/blogs/economist-explains/2016/09/economist-explains-economics-1

10

https://www.economist.com/news/economics-brief/21702428-george-akerlofs-1970-paper-market-lemons-foundation-stone-information

11

https://www.journals.elsevier.com/the-journal-of-economic-asymmetries/

12

https://cob.jmu.edu/rosserjb/nobel%20prize.%20akerlof-spence-stiglitz.doc

13

https://www.economicsonline.co.uk/Market_failures/Information_failure.html

14

https://www.unwe.bg/eajournal/en/journalissues/article/6758

15

https://www.cato-unbound.org/2015/04/06/alex-tabarrok-tyler-cowen/end-asymmetric-information

16

http://www.economicshelp.org/blog/glossary/asymmetric-information/

17

http://theconversation.com/economic-theories-that-have-changed-us-asymmetric-information-42120

18

http://www.4sighthealth.com/when-healthcare-is-a-lemon-asymmetric-information-and-market-failure/

19

https://cepr.org/active/publications/discussion_papers/dp.php?dpno=10125

20

https://link.springer.com/article/10.1007/BF00138305

What a productivity of @Laith Al-Ani! 20 answers in a row, as it was done on another thread(s)!

Dear H.G. Callaway,

The problem of information asymmetry is one of the most important prerequisites for the functioning of the public sector, but for this it is necessary, first, to identify the reasons for the asymmetry of information that arise in different markets, and secondly, if possible, to determine the ways of influencing the relevant markets.

An important reason for the decrease in the intensity of competition and the acquisition of monopoly power in the markets is the incompleteness and asymmetry of information about the object of the transaction, the order of the transaction and its possible consequences, which may be caused by the following reasons:

• Obtaining information is known to be associated with resource costs, so a rational economic entity will not pay for information in the event that the marginal costs of obtaining it exceed the marginal revenue from its use;

• the information is not always reliable. Thus, due to changes in the economic environment, the information received by the economic entity today and tomorrow may become obsolete and, therefore, it can not be used to make economic decisions;

• economic entities are not able to assess all the available information. At the same time, a certain part of the aggregate information is lost;

• Not all economic entities have sufficient knowledge and skills that allow them to evaluate incoming information.

Regards, Shafagat

As it happens in Biology, "assymetry of information" is used (and so it becomes important or used to) to differentiate the target society/person. This starts from new born to all ages. The parents provide the first "assymetry of information" to their child. 

The question/concern "under conditions of asymmetric information, market economies perform poorly " means that global economy wants unique and global direction. What means "perform" is defined by the one that activates the "assymetry" or gets the profit. 

If, we consider that the economy does not need "our information " to perfrom and it functions on the true needs&demands of the society then we likely are in a true Democratic pathway. 

The word "Information" is the idiotic concept which has arisen in the years of World War I when people in millions perished and listened to morons of generals who have thought up this concept to count millions of corpses of war. Information is a transfer of commands between troops by blood-thirsty generals and officers at the time of mass death of soldiers and other people. This word has to real "life" no relation. This word of death and war, word of millions of corpses, but not living people. If you hear the word Information today, it means that tomorrow you will see millions of corpses of people. Sincerely, Alexander

Philadelphia, PA

Dear all,

A new question:

https://www.researchgate.net/post/What_is_oligarchy_Is_there_a_present_danger_of_oligarchy

Please have a look.

H.G. Callaway

I consider its prevalence a danger, otherwise there must be a balance!

Dear H.G. Callaway , have you read this text. I suppose that you have done.Starting from page 17 of this document, he has written a lot about the issue of assymmetries of information and how to overcome it.

I agree with Shafagat Mahmudova