3 ms·

> "You're never as careful when spending other people's money." That's a nice description of: https://en.wikipedia.org/wiki/Principal%E2%80%93agent_problem ht

> "You're never as careful when spending other people's money." That's a nice description of: https://en.wikipedia.org/wiki/Principal%E2%80%93agent_problem https://en.wikipedia.org/wiki/Principal%E2%80%93agent_proble... > This is highly unusual in most professions: Imagine if your roofer grabbed whatever shingles they liked best and billed you for it after they were up. Now imagine every roofer worked the same way. I mean, this basically is my experience with contractors, auto mechanics and most other professions where there's a lot of information asymmetry between consumers and providers. In a capitalist exchange, buyer and seller are opponents and both will use the others' lack of knowledge to their advantage (or be outcompeted by others that do). It's a fundamental dilemma of our world. The more expertise a task requires, the more important it is to hire someone to do it instead of doing it yourself. But the more necessary that person is, the less qualified you are to evaluate their performance.

AlanYx 6y ago
>I mean, this basically is my experience with contractors, auto mechanics and most other professions where there's a lot of information asymmetry between consumers and providers. The unique feature of the medical care system that's different from most other professions is that there's multi-way asymmetry. An auto mechanic generally does have some rough idea of how much a given repair costs (inclusive of labor and materials) or at least can easily inform him/herself. It's a basic two-party information asymmetry where the professional making the decision has more information than most consumers. In medicine, physicians often have no idea themselves what the total cost of treatment will be, and there are various structural and economic factors that discourage or make it very difficult for physicians to find this information. This is a very different type of information asymmetry, where both the providers and the consumers lack information.

AlanYx 6y ago

>I mean, this basically is my experience with contractors, auto mechanics and most other professions where there's a lot of information asymmetry between consumers and providers. The unique feature of the medical care system that's different from most other professions is that there's multi-way asymmetry. An auto mechanic generally does have some rough idea of how much a given repair costs (inclusive of labor and materials) or at least can easily inform him/herself. It's a basic two-party information asymmetry where the professional making the decision has more information than most consumers. In medicine, physicians often have no idea themselves what the total cost of treatment will be, and there are various structural and economic factors that discourage or make it very difficult for physicians to find this information. This is a very different type of information asymmetry, where both the providers and the consumers lack information.