Information asymmetry happens when buyers and sellers have different levels of information, leading to adverse selection in the market. Adverse selection occurs when one party, either the buyer or the seller, has hidden information about the product and makes buying or selling decisions based on that information. For example, in the used car market, buyers cannot know everything about the cars and cannot fully trust them. Because of this, they often try to buy used cars at lower prices to evaluate their quality. To make buyers feel more confident, sellers might promise to repair the car free of charge if it breaks within a year after purchase, protecting themselves against adverse selection. A successful transaction depends on strategies that align with the market’s specific characteristics. - Joseph’s “just my thoughts”
Design ethics is an essential field of study. You may wonder if ethics play a role in design, but they are crucial, particularly in terms of addiction. Slot machines, for example, are four times more addictive than other gambling games. This heightened addiction is mainly due to the variable rewards these games provide. Some designers view this addiction as a means to increase profits. A classic example is a screen with an infinite scroll function, which can lead to excessive time consumption. This occurs because the game’s rewards are unpredictable, and some designers tie this addiction directly to revenue generation. Therefore, ethical considerations are vital across all domains. - Joseph’s “just my thoughts”