Unit 2.10: Asymmetric information (HL)
Asymmetric information is an imbalance of information between buyers and sellers in a market that gives one side an unfair advantage in a transaction. For example, when someone buys a used car, the seller will normally know more about the car than the buyer. The seller might know the engine is unreliable but chooses not to tell the buyer. Policy responses to asymmetric information through legislation and regulation...