A collector is considering purchasing a vintage luxury watch from an online specialist dealer. The watch is advertised as being 'fully restored with 100% genuine vintage parts' and is listed at a correspondingly premium price.
In this situation, asymmetric information is most likely to lead the collector to:
purchase the watch because they assume the high price is a guarantee of its authenticity.
possess superior information regarding the watch's true service history compared to the dealer.
maximize their consumer surplus by negotiating a price below the market equilibrium for a brand new watch.
decide not to purchase the watch because they are unable to verify the dealer’s claims about its genuine condition.
