Generally, caveat emptor is the contract law principle that controls the sale of real property after the date of closing, but may also apply to sales of other goods.
Defects in the good or service may be hidden from the buyer, and only known to the seller. Thus, the buyer should beware. This is called information asymmetry.
In contract theory and economics, information asymmetry deals with the study of decisions in transactions where one party has more or better information than the other.
This creates an imbalance of power in transactions, which can sometimes cause the transactions to go awry, a kind of market failure in the worst case.
Examples of this problem are adverse selection, moral hazard, and information monopoly.
Most commonly, information asymmetries are studied in the context of principal–agent problems. Information asymmetry causes misinforming and is essential in every communication process.
Perfect information (which is the opposite of information asymmetry), is one of the key assumption that is made when explaining a neo-classical theory of economics.
In 2001 the Nobel Prize in Economics was awarded to George Akerlof, Michael Spence, and Joseph E. Stiglitz for their "analysis of markets with asymmetric information".
So, if these 3 economists won this prize in 2001, then it logically stands to reason, that the data around which they made their discoveries must have come before 2001 but how far back did they go... or, should we go in our investigation to see where this lopsided concept may have originated?
And, does that investigation really matter as long as we know that this theory develop in the minds of Americans?
And, that in the minds of those Americans, there was absolutely no desire to tell the truth, at least to the buyer. But, if a person lies in one area, can we assume that they will in other areas or they they will eventually lie in other areas?
And, if that assumption can be proved as true then what influence does this have on people around them like:
- bosses
- subordinates
- spouse
- children
- friends
I know that I stated that it does not really matter how far back we go prior to 2001 but I would suspect that these economists found very little intentional evidence earlier than 1950 and I base that conjecture on the fact that 1950 is when the economic tidal wave of growth began on which my father rode throughout his 40 year career.
And, it was in those formative years of mine that I began to notice the following teaching example:
DO AS I SAY NOT AS I DO
Those of you who are in your 60's or older probably know exactly what I am writing about and if you do, no doubt share my thoughts, concerns, and reluctant anger; but, why am I writing about this concept?
Yesterday, I got a phone call from Best Buy about my ASUS computer that I had left there a couple of weeks ago to get repaired.
But, before I delve into that story let me give you some background information.
A couple of years ago, I purchased a Dell Inspiron from Best Buy and 4 days past the last day to return the laptop for full refund or replacement, my computer CRAPED OUT... that is to say it would freeze up and the only way to get out of it was to perform a hard reboot because a soft reboot would not work.
After arguing with Dell on the phone about replacement, they sent a technician out to the house no less than 6 times to work on this computer with no positive results. In addition, I returned the computer to factory service 3 times where it was worked on and returned a month or two later with no positive results. Numerous parts were replaced with no positive results, so, I just put the computer aside and purchased another one, but not a DELL.
This time, I purchased an ASUS and got that “bad boy” fully loaded to make sure that I had myself a good machine. However, 2 years later, this machine started freezing up and would not hold onto installations of software that I installed which was, in essence, plug and play, to operate an external mouse.
Sometime around this time, my wife was looking for new kitchen appliances and found the best price at Best Buy. While there, she took the initiative to set up a computer repair contract for 12 months with the Geek Squad which would cover 3 computers.
So, I took my Dell into the Geek Squad and less than 5 days later, they call and said my Dell was ready for pickup. At the Geek Squad counter, I asked them what they had done and they indicated that they just reloaded the operating system after running diagnostics.
I have used this Dell steady now for over 2 months without the slightest issue... Surely, this problem was not this simple? But, if it was this simple, then why did I have to go through all this other stuff with Dell's Customer Service?
One would think that replacement would have been cheaper on Dell in the long run.
So, now we are back to the ASUS... and, because I got positive results with the Dell, I took my ASUS to the Best Buy Geek Squad for the same diagnostic tests and reloading of software, but unfortunately, the results were not the same.
My hard disk drive was damaged and no doubt had been bad from the getgo and was not discovered before being shipped out to Best Buy and a buyer like me who knew less than they did.
When I worked at ITT Technical Institute, I remember our IT guy would re-image all the computers in the labs all at once at the end of each quarter and right before the beginning of the next quarter. He performed this re-imaging process because he could re-install the operating system on 30 computers in the same amount of time it took to do it for 1 computer.
This is the same concept that companies like DELL and ASUS use on their factories, except they might re-image 100 at a time rather than 30 or it could be even more than that. Re-imaging is supposed to make a perfect copy or replication of an image but there are always some of these (statistically) that will not be done correctly.
In fact, if this re-imaging process is done with 99.7% accuracy, then there will be 2,600 bad images for every 1,000,000 performed.
So, I had to buy a new hard disk drive which was not bad but when the Geek Squad at Best Buy tried to reinstall the operating system, it had been corrupted from the getgo.
Now, I have to call ASUS this morning, requesting a replacement re-image disk and will no doubt have to pay for that replacement even though it was not my fault.
So far, it has cost me about another $150 because of this asymmetric information concept that seems to be perpetrated on the buying public randomly and at will and without fear of consequence.
Ya know... maybe this is just me... but, this kinda shit just pisses me off...
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