What is essential to markets?
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The free flow of information is essential to the efficient operation of markets. If a buyer knows that cars are cheaper at one dealership than another, she or he will buy at the less expensive dealership. But if this information is not available, the buyer may spend more money than necessary. This would leave less money to spend on something else, and thus markets would be less efficient. Information, then, is essential, whether passed by word of mouth, newspaper advertisements, or other means. Sellers sometimes try to restrict such information or scheme to keep prices high. Economists refer to such schemes as price-fixing or collusion, and governments generally outlaw such practices.
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