Information asymmetry growing hugein the light of the COVID-19

Abstract

Information is a product in economics, resource for someones, finished good for others, with its price, costs, demand, supply and market. There are sectors, e.g. in the pharmaceutical industry, where it is the key input, but essentially all actors in the economy need to acquire certain units of it, because no economic activity — consumption, savings, employment, levying or paying taxes — can be carried out effectively without it. Information asymmetry is a wellknown phenomenon in economics. It can occur in any market where the buyer and the seller have different levels of information which generates significant additional costs and risks, as well as hinders rational decision-making. The phenomenon must be taken into account when transactions are also complicated by a principal–agent relationship. The topic of the writing is how the epidemic situation amplifies the negative effects of information asymmetry in the information market. Firstly, I describe the market role of information, then the explanation and consequences of information asymmetry are outlined. The following sections deal with the news market and the special decision situation caused by the epidemic. One of the conclusions of the writing is that the consumer is not always able to properly optimize consumption, and his overconsumption does not improve but worsens the quality of his decisions. This phenomenon has been intensified by the uncertainty caused by the COVID-19 pandemic. Another conclusion is that several negative externalities are caused in the news market by the behaviour of the providers and contributors. Therefore, internalization can be the solution.