Wednesday, 7 December 2016


Many occurrences in real life, and many a value class can be connected to, or evolved from, so many concepts, theories, and principles in Economics. One such is asymmetric knowledge. In the light of the Indian - origin student* in Oxford University suing his 'boring' teacher and holding the teacher accountable for his low grades, it would be interesting to look into the concept of asymmetric knowledge in the field of education. Many teachers impart not knowledge, but half baked knowledge. Since the profession is not taken seriously and the mechanism of rewarding a good teacher is very subjective this area of work has often been considered not that important. The ones who suffer however are the  students who are at the receiving end. Forgive me but I can honestly - label this as the teacher cheating the student!

What is Asymmetric knowledge?
Do you know why the members of the International Health Economics association named their annual award for outstanding published work in Health Economics after Kenneth Joseph Arrow? Well this was because of the importance they laid on his classic article in the field of Health Economics viz., Uncertainty and the Welfare Economics of Medical Care ( American Economic Review, 1963). He was one economist who integrated uncertainty into economic models.
Though the Nobel Prize he was awarded in 1972 was because he totally revolutionized the way economists think about General Equilibrium and social choice, yet his contribution to the subject of Health Economics is a real treasure. His investigations into the concept of asymmetric informations are extremely interesting. In many transactions one party, normally the seller, has much more information about the product than the buyer. This enables the one who has more information, to cheat the one who has less. It is because of this that the market structures have developed features such as warranties and third party authentications. This allows the  market with non perfect information to actually function. It was in this connection that Arrow investigated the issue of medical care in his paper published in 1963. Later on other economists used this idea of asymmetric information to examine the working of second hand assets market.
In Economics, asymmetric information examines the study of decision making when one party is less informed than the other. Both The classical and Neoclassical economists  evaded this real problem by assuming homogeneity and perfection. 

However this is not real life - Real life is far from perfect. In fact in reality it is about how much more one knows, than the other . What we do not know then makes the major difference in every walk of life. Remember the lack of knowledge causes the balance of power to tip, favouring the one who has more knowledge. It is for this reason that knowledge is one good investment. it is the foundation of every other kind of capital. Knowledge includes information and skill, and this accumulates with experience. Infact tacit knowledge one has, no one else can acquire. it is hence imperative that we amass knowledge in every possible way. As teachers we belong to a community that has to impart knowledge. However it is indeed very sad that many teachers do not really have the passion to do so. May be they are governed by the concept of asymmetrical information that keeps them on a higher pedestal than their students!

The mission of a teacher is a calling s/he has responded to, for spreading knowledge and hence this economic theory should not be adopted in the profession of teaching. Many teachers simply do not teach. In fact they either do not have the knowledge, or if they do, they are either too lazy to teach or they are under the sway of what K. J. Arrow wrote about viz. asymmetric information. If such is the case the call has been a fake one, or just an echo in the hollow cave of a so called teacher's mind. 

In such a case may be students will then realize that "Books are the quietest and most constant of friends; they are the most acceptable and wisest of counselors, and the most patient of teacher" - C. W. Eliot

Let us hence be wary as to not insult this noble profession.

crystal david john

*Faiz Siddiqui studied modern history at Brasenose College