What's interesting is that broadly speaking, people acknowledge that negotiating with asymmetric information is immortal or wrong. Take the stock market for example, insider trading is illegal and you don't often hear calls to reverse these laws.
But when it comes to private markets and semi-private negotiations that same sentiment doesn't easily transfer. Does society benefit in some unique way for allowing asymmetries in labor negotiations, private markets like Uber, or B2C relations like Robinhood (1,2)?
1. https://www.sec.gov/newsroom/press-releases/2020-321
2. Note, Robinhood was fined not for front-runniny customers, just for falsely claiming customers received quality orders. I suspect theyve only stopped the latter behavior.
> broadly speaking, people acknowledge that negotiating with asymmetric information is immortal or wrong
I don't think that's true at all. Companies and individuals negotiate all the time with information the other party doesn't have. Insider trading is about fairness on public markets so every negotiating party of the same type has the same information, and is quite specific to that.
> What's interesting is that broadly speaking, people acknowledge that negotiating with asymmetric information is immortal or wrong. Take the stock market for example, insider trading is illegal and you don't often hear calls to reverse these laws.
Insider trading is not about fairness. It’s about theft. If you overhear someone in a public place talking about an upcoming merger, you can trade on it.
> What's interesting is that broadly speaking, people acknowledge that negotiating with asymmetric information is immortal or wrong.
They do? I’m quite happy when I have more information than the party I am negotiating with.
Do you tell your customers all of the input costs of the product or service you sell? I doubt it.
Also, certain parties that trade in public markets have way more information than any retail investor could ever hope to have, hedge funds buy satellite imagery of parking lots, track oil tankers at sea, etc to gain an edge.
Insider trading rules are meant to prevent the public bagholding stocks from the management team having insider information that no other market participant could or should have, there are no rules against legally gathering or purchasing information on your own to gain an edge over other market participants.
Incentive wise you're probably a lot better off if your own broker is front running you than if a HFT desk at a liquidity provider firm is doing it since the broker is at least in a position to kick some of that back to you in the form of reduced fees or whatever.
I agree with you. I'd go further and suggest that candidates should get anonymized information about applicants in the pool. Nothing like negotiating with yourself for a job...
But when it comes to private markets and semi-private negotiations that same sentiment doesn't easily transfer. Does society benefit in some unique way for allowing asymmetries in labor negotiations, private markets like Uber, or B2C relations like Robinhood (1,2)?
1. https://www.sec.gov/newsroom/press-releases/2020-321 2. Note, Robinhood was fined not for front-runniny customers, just for falsely claiming customers received quality orders. I suspect theyve only stopped the latter behavior.