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New Markets as Informational Asymmetries

Author

Listed:
  • Eric Scorsone

    (University of Kentucky)

  • Stephan Weiler

    (Federal Reserve Bank)

Abstract

The neglected advantages of “new markets†in marginalized rural and inner-city areas have been touted in the policy arena since the early 1990s. Althoughmuch of the motivation has been based on equity, there are potentially strong efficiency arguments for such renewed attention. This article proposes a unique combination of classic and more recent work on informational market failures to understand new markets as examples of informational asymmetries, which can provide the rationale for both private and public support of new market ventures. Furthermore, this perspective can help explain persistent intraregional differences in economic development prospects due to path dependencies inherent in varying informational settings.

Suggested Citation

  • Eric Scorsone & Stephan Weiler, 2004. "New Markets as Informational Asymmetries," Economic Development Quarterly, , vol. 18(3), pages 303-313, August.
    • Handle: RePEc:sae:ecdequ:v:18:y:2004:i:3:p:303-313
    DOI: 10.1177/0891242404265139
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    References listed on IDEAS

    as
    1. Stephan Weiler & Eric Scorsone & Madeleine Pullman, 2000. "Information Linkages in Local Economic Development," Growth and Change, Wiley Blackwell, vol. 31(3), pages 367-384.
    2. Grossman, Sanford J & Stiglitz, Joseph E, 1980. "On the Impossibility of Informationally Efficient Markets," American Economic Review, American Economic Association, vol. 70(3), pages 393-408, June.
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    6. Stephan Weiler, 2000. "Information and Market Failure in Local Economic Development: A New Role for Universities?," Economic Development Quarterly, , vol. 14(2), pages 194-203, May.
    7. Stephan Weiler & Jesse Silverstein & Kace Chalmers & Erin Lacey & William Rogers & Benjamin Widner, 2003. "Understanding the Retail Business Potential of Inner Cities," Journal of Economic Issues, Taylor & Francis Journals, vol. 37(4), pages 1075-1105, December.
    8. Lang William W. & Nakamura Leonard I., 1993. "A Model of Redlining," Journal of Urban Economics, Elsevier, vol. 33(2), pages 223-234, March.
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    11. Stephan Weiler, 2000. "Pioneers and Settlers in Lo-Do Denver: Private Risk and Public Benefits in Urban Redevelopment," Urban Studies, Urban Studies Journal Limited, vol. 37(1), pages 167-179, January.
    12. Stiglitz, Joseph E & Weiss, Andrew, 1981. "Credit Rationing in Markets with Imperfect Information," American Economic Review, American Economic Association, vol. 71(3), pages 393-410, June.
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    2. Mark Drabenstott, 2005. "A review of the federal role in regional economic development," Monograph, Federal Reserve Bank of Kansas City, number 2005arotfrire, March.

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