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How shopping can eliminate information asymmetries

by: Irene Wu

October 13, 2010

(Part of the ongoing WISENET Series)

[[wysiwyg_imageupload:137:height=99,width=70]]The last time I shopped for a laptop, I conducted an extensive online search.  I read articles from computer shopping magazines.  I looked at user reviews.  Then, I started comparing prices online.  I visited the manufacturer’s website.  With regret, I learned that in Hong Kong they were selling the same laptop with a fancy Vivienne Tam design which was unavailable in the US!  Finally, I found a big chain store with the best price.  I clicked through to order.  Then, a note popped up that the laptop (blue!) was in stock at the bricks and mortar store two blocks from where I live.  I reserved it online and walked down the street to pick it up.  Before online shopping, it was hard to know whether the prices in the neighborhood shops were better or worse than elsewhere.  Finding the answer cost time, energy, and money.  But, now the consumer has better access to information, there is a better balance between what the customer and the salesperson knows – the information asymmetry is mostly eliminated.  How have ICT’s eliminated information asymmetries in your experience? … In the next post of this series, collective action and the impact of ICT on society... .

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