Asymmetric Information Means

question 17

Multiple Choice

Asymmetric information means

• A) some market participants have more information than others.
• B) some news are more important than others.
• C) some market participants interpret news differently.
• D) the impact of news on economic outcomes depends on the context.
• E) consumers do not understand completely their own preferences.

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Definitions:

Stereotype Threat

The suspicion a member of a group holds that he or she will be judged based on a common stereotype of the group.

Confirmation Bias

The tendency to focus on information relevant to a belief and ignoring or downplaying information that is inconsistent with that belief.

Anchoring and Adjustment

A cognitive bias where individuals rely too heavily on an initial piece of information (the "anchor") when making decisions, with adjustments made too conservatively.

Representativeness

A cognitive heuristic where an individual judges the probability or frequency of an event by how much the event resembles the typical case.