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Intro Econ 2: Markets & Pickles

Planet Money Summer School

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Are There Places Where a Market Shouldn't Work?

There are some parts of markets where, if people don't have trust, they work really, really poorly. Economists call this trust problem an information problem. If i don't trust you that you would tell me bad news about the product, then i start to worry your trying to sell me a dud. When one person knows something that the other doesn't, and there's not bonds of trust between them, that can really undermine markets. It's a big deal also in health insurance and health care markets as well.

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