Abstract:

Semi-public goods and the problem of asymmetric information are considered as the two main market failures in public finance. Education and health are the best-known examples of semi-public goods and services that cannot be excluded from their benefits, although there is competition in their consumption. Due to the fact that the consumption of semi-public goods and services provides private benefit to individuals and can be priced, these goods and services are also produced by market as well as state. Another market failure is the asymmetric information problem. Asymmetric information is when one party has more information than the other during the transaction. Health services are exposed to market production besides public production due to their property of semi-public good. However, there is also an asymmetric information problem in health services. The lack of symmetrical information between those demanding and supplying health services may prevent the real market price of the service provided. In this study, the relationship between semi-public goods and asymmetric information is explained through the health sector example. Semi-public goods and asymmetric knowledge, expressing two market failures, are explained in a conceptual and theoretical framework. Health economics, which is an example of semi-public goods and services, and the asymmetric information problem, which is intensely experienced in the health economics, are explained. The study, in which evaluations are made from the behavioural economics perspective, aims to emphasize the importance of public production of health services.

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