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The economics of public-sector pay

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Imperfect information

In this centrespread, Steve Stoddard outlines the concept of imperfect information and explains the potential consequences

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■ Imperfect information means that economic agents (consumers, producers, governments) do not know everything they need to know in order to make a fully informed decision.

■ Imperfect information makes it difficult for economic agents to make rational decisions and is a potential source of both market failure and government failure.

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Previous

The economics of public-sector pay

Next

How do central banks maintain economic stability?

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