Marketing

Asymmetric Information

Asymmetric Information

Asymmetric information is the specialization and division of knowledge in society as applied to economic trade. It deals with the study of decisions in transactions where one party has more or better information than the other. In contrast to neo-classical economics which assumes perfect information.  It is another significant, market failure in two basic situations. Firstly, information failure exists when some of the participants in an economic exchange do not have perfect knowledge. Secondly, information failure exists when one participant in an economic exchange knows more than the other.