The Ku Klux Klan used information asymmetry to their advantage by maintaining an image of mystery and fear through the use of passwords and secret handshakes. This allowed them to exert control and influence. However, when a journalist named Stetson Kennedy infiltrated the group and revealed its secrets on a popular radio program in the 1940s, this led to a dramatic drop in KKK membership as their mystery was turned into ridicule.
Author Steven Levitt, working with journalist Stephen Dubner, shows how economic theories can be use...
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