Educational Institutions and Information Asymmetry Observation in UAE

Amjad Khan Suri,Adnan J

doi:10.4172/2375-4389.1000213

Abstract

Nobel Prize winner Akerlof proposed lemon theory and showed how information asymmetry in the market creates an unbalanced information where poor quality offerings (lemons) wipe out good quality offerings in the market. Akerlof’s model was originally developed in the context of used cars in the market where lemon problem was frequently observed. However, the theoretical problem lemon is not limited to the car market but also valid in other markets with the same situations. The present study focuses on information asymmetry observed in the education system in UAE because of an “information gap” due to the asymmetric information.

Highlights

Adverse selection was first pioneered by George Akerlof in his article “The Market for Lemons: Quality Uncertainty and the Market Mechanism”, which examined the markets for insurance, used motor vehicles, employment and credit [1]
From the analysis of asymmetric information it is obvious that students, universities, and the local economy focus on attaining short term economic goals
Universities importance in using innovative way to pass the information about the feasibility and intellectual worthiness of the program is not used by the universities

Summary

Introduction

Adverse selection was first pioneered by George Akerlof in his article “The Market for Lemons: Quality Uncertainty and the Market Mechanism”, which examined the markets for insurance, used motor vehicles, employment and credit [1]. Akerlof explores adverse selection by the use of asymmetric quality information about the purchase of used motor vehicles to show market failure and observed price differentials between new and used cars and explored why they occur. Economic agents are not aware of the market situations in respect of each educational program available in the market Examples of this include that the students do not know the price of a particular course at each university offers with universities facing the similar dilemmas over the selection of the students. It’s difficult to establish the complexity of the items being traded with the availability of asymmetric information in the particular product market It is not just the uncertainty economic agent’s face, but the distribution of the asymmetry of information shared between agents that can influence their actions in the market.

Participants Students

Conclusion