Unit 2.10: Asymmetric information (HL)
This page explores the nature of asymmetric information as a market failure from both buyer and seller perspectives, including adverse selection, moral hazard, and relevant policies. Asymmetric information is an imbalance of information that exists 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...