Quarterly Journal of Austrian Economics
A Note on the Canard of "Asymmetric Information" As a Source of Market Failure
Volume 14, Number 2; Summer 2011
The notion that so-called asymmetric information is a source of market failure is deeply flawed. Asymmetric information is essentially a synonym for “the division of knowledge (and labor) in society,” which is the whole basis for trade and exchange and the success of markets. The real asymmetric information problem, moreover, is with government, since all taxpayers are rationally ignorant of almost everything government does. Asymmetric information is therefore a source of government failure, not market failure.
Cite This Article
DiLorenzo, Thomas. "A Note on the Canard of "Asymmetric Information" as a Source of Market Failure." The Quarterly Journal of Austrian Economics 14, No. 2 (Summer 2011): 249-255.