Inspired by the style of my new cohort and fellow blogger Carlos Cruz of Pargmatarianism, I played around with Google search results a little bit. When you do a Google search for the term “information symmetry,” Google assumes you left off a letter and instead shows you results for “information asymmetry.” The elusive Google algorithm must note that there is a critical ratio of results for “information asymmetry” versus results for “information symmetry,” and also that the difference between the two search phrases is one measley little letter “a.” That “a” also happens to be right next to the following letter “s” on the keyboard, perhaps increasing the chances of Google’s interpretation of the missing “a” as a typo. Also, though I doubt that Google’s algorithm cares about this, any web site mentioning “information symmetry” probably also mentions “information asymmetry,” so there’s likely to be redundancy in the search results.
Information asymmetries are probably discussed more often in part because they would be an identifiable feature of a market or business transaction. For example, it is worth noting that the now endangered species of real-estate agents make their living because they have access to information that typical home buyers do not; so there is an information asymmetry: the real-estate agent has a preponderance of information regarding the transaction and the home buyer has limited information regarding the transaction.
However, it is not nearly as noteworthy to point it out when there’s an information symmetry, in which both parties have equal information about the transaction. For example, a seasoned property management company submits a proposal, and three seasoned contractors put in their bid. There may be many aspects and incidents yet unknown that will occur over the course of the project, but those future events are unknown to both the property manager and the contractors. Especially if the property manager and the contractors are experienced, there is not much mystery as to how much labor, materials, and equipment are going to cost the contractors, so we can say that the transaction between the construction company and the winning bidder has symmetrical information.
As I mentioned in a previous post, the Internet is destroying information asymmetries everywhere. Financial data is available for publicly traded companies, sites like glass window let you know what a company’s culture is like from the perspective on an insider, sites like wiki leaks continue to expose wrongdoers, and even Google can organize shopping results and tell you how to buy a product cheap, giving you a rough idea of an item’s wholesale value. As the Internet evolves, the cost of information is likely to continue to approach zero, and with it the murkiness surrounding transactions and the products and agents involved in those transactions.
I hope that this transparent trend will one day spread like wildfire in the public sector. In his blog about pragmatarianism, Carlos Cruz imagines a society with two markets: a private market with prices and a public market in which taxpayers choose how to allocate their tax dollars. Tax choice is a topic about which I’ve written before, but emails I’ve exchanged with Mr. Cruz over the past couple of weeks have reinvigorated some of my thoughts regarding it.
Cruz pointed out to me that civic crowdfunding is kind of like watching tax choice play out on a small, local level. It’s a great demonstration of how projects might easily get advertised, organized, and completed if taxpayers had a choice in the allocation of their tax dollars. Take special note of the transparency in civic crowdfunding projects; in a world where the Internet is destroying information asymmetries everywhere, the duel markets of a pragmatarian system would thrive.
One question that Cruz and I discussed regarding pragmatarianism is how efficiently the “public” market would be able to measure the intensity of demand given that there are no prices. My take is that in a world of symmetrical information, very efficiently.