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by slg
4270 days ago
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The scenario you paint isn't common for a number of reasons, but the primary issue is information asymmetry. I don't know enough about food preparation and don't have access to the kitchen of a restaurant, so I have no idea how to properly assign it a health rating. The restaurant itself can obviously produce a health rating, but if they are the type of place to skimp on health issues, it isn't that much of a stretch to believe they may lie about health issues. The free market result will then be a mess. Customers who want a healthy restaurant won't know which ones are truly healthy. That makes it a hard to justify paying the premium for a health rating that could just be a lie. The restaurants then have little motivation to actually care about health since they can't prove it to their customers. In the end, you will have a market that is dominated by cheap and low quality goods (check out "the market for lemons" [1]). The video game system is not an exact equal. The main difference is that there generally isn't information asymmetry in video games. The customer will be able to play the game and by the end of it have all the same information as the creators of the game. That provides accountability. A classic example of both that accountability and information asymmetry was GTA and the whole hot coffee scandal. The developers hid sexually explicit content in the game that was not factored into the rating. Once knowledge of that leaked out, there was a lot of backlash and the rating for the game was eventually changed. Banking, finance, and Wall Street likely have even more information asymmetry than the food industry, hence the need for an external and trusted source of oversight. [1] - http://en.wikipedia.org/wiki/The_Market_for_Lemons |
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I'm not saying the restaurant itself would give itself a rating, I'm saying that if there was an economic advantage to information garnered from food safety, a private company could charge restaurants to get rated, and restaurants would seek ratings to garner customers. The fact such a service does not exist indicates that customers don't care about food safety enough to change their dining preferences to restaurants that provide such information, or else restaurants would do it, and I would be the first to line up to found that company because it would be an unexploited profit center.
> accountability and information asymmetry was GTA...
You can falsify the state of your kitchen just as much to a state inspection agent as a private one. And in both cases being caught doing it has repercussions, the former would be police at your door, the later a slander campaign by the ratings board.