Daniel H. Pink argues in “To Sell is Human” that the web has transformed “information asymmetry” and therefore transformed the way we buy and sell almost everything.
“Information asymmetry” occurs when one side possesses more information than the other in a two-way transaction—a used car purchase, for example—giving the side with more information a major advantage in the transaction.
Before Carfax, the used car salesman knew the real history of the 5-year-old Camry on the lot. The would-be buyer had no way of knowing if the car had been through a gauntlet of accidents. If the salesman was unethical, he could use this information advantage to rip off the buyer.
Before the web, this phenomenon existed in almost every industry and transaction, which is why consumers paid agents of trust, such as financial advisors and travel agents, to make sure they didn’t get ripped off. As business buyers, we entrusted brokers to evaluate insurance premiums and buying groups to negotiate lower prices.
We lived in a “buyer beware” world and whole industries existed to protect us.
But now, we live in a world of information parity, from sites like Kayak that allow us to instantly compare airline and hotel prices (bye-bye travel agents), to the billions of reviews on Amazon, Yelp and Angie’s List that help us vet and evaluate products and services (bye-bye deceptive marketers).
We live in a “seller beware” world; if you rip buyers off, they have a mechanism to expose you and shut you down.
How is this any different from the reckoning facing police forces right now?
Police used to have all the information about their interactions with citizens, so when something tragic happened, the only record was a (biased) officer’s account.
But now, cell phones and body cameras reveal these interactions for everyone to see and analyze. If there wasn’t a video of George Floyd’s murder, there wouldn’t be protests and calls for reform sweeping the nation right now.
Power is shifting or at least transforming. As always, I’m interested in the questions we should be asking at a moment like this:
- In the cases of videos of police brutality or other abuses of power, do these incidents represent a verifiable trend? Or do they act upon our biases such as clustering illusion and selection bias to elicit hysteria?
- Where are the other dark corners where information asymmetry still exists and how can we expose them? Many social justice activists encourage taking a wider focus than policing—common practices such as cash bail and mandatory minimum sentencing, for examples—to expose widespread inequality.
- How do we act when the asymmetry favors us—when we’re the ones with the advantage?
What a time to be alive.