ABSTRACT
This chapter focuses on what is probably the most important deviation found in health markets and some other markets, from the standard set of assumptions of the demand model proposed in Chapter 2 – the information problem. The standard model assumes that consumers are sovereign, or are the best judges of their own interests. This point may have passed unnoticed in thinking about the health economist’s decision to phone his mother or surf the net. While his mother may be an exception, most people will not believe they understand the economist’s interests better than he does himself in this respect. As soon as we enter health markets a range of objections to this perspective implicitly and explicitly arise.
