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Analysis and Countermeasures of Market Economy under the Background of “Information Asymmetry”

In: Proceedings of the 2022 2nd International Conference on Economic Development and Business Culture (ICEDBC 2022)

Author

Listed:
  • Muye Li

    (Beijing Normal University-Hong Kong Baptist University United International College)

Abstract

In a market economy, the balance between demand and supply will be realized through the spontaneous adjustment of the “invisible hand” of price, thus realizing the optimal allocation of resources. But sometimes, due to “market failure”, relying on the market alone cannot achieve the optimal allocation of the market. Therefore, “information asymmetry” is one of the main causes of “market failure”. This paper adopts survey method and literature research method to analyze causes of asymmetry, negative effects of information asymmetry, and solutions. Through the analysis of this paper, the author finds that the emergence of information asymmetry will have a variety of negative effects on market transactions and bring moral hazard. The government can solve the information asymmetry problems by introducing policies and using high-tech methods.

Suggested Citation

  • Muye Li, 2022. "Analysis and Countermeasures of Market Economy under the Background of “Information Asymmetry”," Advances in Economics, Business and Management Research, in: Yushi Jiang & Yuriy Shvets & Hrushikesh Mallick (ed.), Proceedings of the 2022 2nd International Conference on Economic Development and Business Culture (ICEDBC 2022), pages 1306-1310, Springer.
    • Handle: RePEc:spr:advbcp:978-94-6463-036-7_192
    DOI: 10.2991/978-94-6463-036-7_192
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