Noah Smith — The Dirty Little Secret of Finance: Asymmetric Information

Noah gets one right.

There’s a very deep, important concept in economics that gets way too little attention from the public (and possibly from economists themselves). This is the idea of asymmetric information. The concept has been around for decades, and research about it has won Nobel prizes, but neither the profession nor the public has ever put it at the center of our understanding of markets. That should change.

A bigger issue than asymmetric knowledge is asymmetric power. That is not to be mentioned in either finance or economics. These are two of the chief tools involved in rent extraction and they are generally disregarded in neoclassical economics.

Bloomberg View
The Dirty Little Secret of Finance: Asymmetric Information
Noah Smith