The next two questions are about interacting with people during COVID. When we encounter another person...

 

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The next two questions are about interacting with people during COVID. When we encounter another person these days, we would like to know how likely it is that they have COVID-19 before we get too close. While many people with COVID-19 don't know they have it, they do know how careful they tend to be (whether they avoid crowds, etc.). So this is a case of asymmetric information - they know how careful they are, and you don't. Further, assume that people who are less-careful are annoyed by people not wanting to meet them, and would like to be perceived as being more-careful. What would our model of asymmetric information tell us might happen if we have no idea how careful the person we're about to meet is being? An inefficiently high number of meetings would occur Everyone would start being extra-careful about COVID Increasingly, people would refuse to meet with anyone, whether they're actually careful or not We'd assume that everyone we meet is being careful about COVID The next two questions are about interacting with people during COVID. When we encounter another person these days, we would like to know how likely it is that they have COVID-19 before we get too close. While many people with COVID-19 don't know they have it, they do know how careful they tend to be (whether they avoid crowds, etc.). So this is a case of asymmetric information - they know how careful they are, and you don't. Further, assume that people who are less-careful are annoyed by people not wanting to meet them, and would like to be perceived as being more-careful. What would our model of asymmetric information tell us might happen if we have no idea how careful the person we're about to meet is being? An inefficiently high number of meetings would occur Everyone would start being extra-careful about COVID Increasingly, people would refuse to meet with anyone, whether they're actually careful or not We'd assume that everyone we meet is being careful about COVID

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In the case of asymmetric information where one party the person you are about to meet knows their l... View the full answer