Question

When a member of a public such as a customer demands and expects full transparency from an organization, but is then less than honest in his/her interaction with that organization a phenomenon called _____ transpires.

Answer 1

Asymmetric information occurs when there is an imbalance of information between a buyer and a seller, leading to potential exploitation or ethical issues in transactions.

Step-by-step explanation:

When a member of the public demands full transparency from an organization but is less than honest in his or her interaction with that organization, a phenomenon called asymmetric information transpires. This term refers to situations where the seller or the buyer has more information than the other regarding the quality of the item for sale, leading to a potential imbalance in the exchange. An example of asymmetric information is when a car salesman knows about a defect in a car that is not apparent to the buyer, or when a customer conceals their ability to pay in order to negotiate a lower price. The term also resonates with broader ethical and trust issues in business interactions, often fuelling discussions on testimonial injustice, where individuals or groups are unfairly treated as untrustworthy.