After a fight about decision making between Phil and Claire regarding Phil’s opportunity to manager a magic shop early in their marriage, Claire surprises Phil by buying the magic shop he originally wanted. One of the things that jumps out to Claire initially is that the previous owner sold her the shop for a very low price, which she now wonders why he was willing to do that. The economic concept of asymmetric information relates to knowledge that one party has in a transaction that the other does not possess. The concept of information asymmetry was the basis for the 2001 Nobel Prize to George Akerlof, Michael Spence, and Joseph Stiglitz.
Second to the information asymmetry, this clip serves as a basis for the discussion on entrepreneurship and competition in markets. While some businesses are started to serve the needs of an area, others are started as passion projects. The ability to owners of businesses to buy and sell their property is a critical requirement of competitive markets.
See more: asymmetric information, competition, entrepreneurism, free entry