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Asymmetrical information inherent in contract

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Reference no: EM132284502

A landlord owns a number of rental properties and wants to hire a property manager to do general maintenance. The landlord decided on a predetermined amount that he is willing to pay for property management services. The amount the landlord is willing to pay is below current market value. After interviewing multiple candidates, the job is accepted by a contractor.

1. Is there asymmetrical information inherent in this contract?

2. Is there adverse selection consequences inherent in the contract?

3. How can the two parties reduce the asymmetrical information problem inherent in this contract?

Reference no: EM132284502

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