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University
| Teaching Since: | Apr 2017 |
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| Questions Answered: | 9562 |
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bachelor in business administration
Polytechnic State University Sanluis
Jan-2006 - Nov-2010
CPA
Polytechnic State University
Jan-2012 - Nov-2016
Professor
Harvard Square Academy (HS2)
Mar-2012 - Present
Suppose you are about to buy a car and ask to see a vehicle history report to check previous accidents or problems reported for that car. When you are told that this information is not available, you decide not to buy the car.
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a) Do you think this example illustrates an adverse selection or moral hazard problem?
b) What is the lesson about the lack of information and the probability that a transaction will occur?
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