Information asymmetry

Information asymmetry,

Definition of Information asymmetry:

  1. Situation that favors the more knowledgeable party in a transaction. In most markets (especially where the goods being traded are of uncertain quality, such as used equipment), a sellers is usually in a more advantageous position because his or her store of information is based on numerous sales conducted over the years. A buyers information, however, is based usually on an experience of only a few purchases. A similar situation exists between a commercial lender and a borrower.

How to use Information asymmetry in a sentence?

  1. You should try to match things up with information asymmetry so that you can figure out how best to proceed.
  2. When Jared went to the used car dealer, Marks Motors, he was concerned that the Ford truck he wanted was not as reliable as Mark said because Jared was a victim of the information asymmetry that favored Mark since he did not reveal the truck had previously been in a minor accident.
  3. Thousands of people get ripped off every year while purchasing a used car due to the information asymmetry between the seller and the buyer.

Meaning of Information asymmetry & Information asymmetry Definition