Information asymmetry can significantly impact decision making. When one party has more or better information than the other, it can lead to an imbalance of power. This can result in suboptimal decisions as the party with less information may make choices based on incomplete or inaccurate data. In the context of the Ku Klux Klan, information asymmetry was used to maintain an image of mystery and fear, influencing public perception and decision making. However, when this information was revealed, it led to a dramatic drop in KKK membership.
Author Steven Levitt, working with journalist Stephen Dubner, shows how economic theories can be use...
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