Share this site with del.icio.us Share this site with furl Share this site with stumbleupon Share this site with google Add this site to Yahoo Bookmarks Click here to add us to your favorites Subscribe to our Feed





information asymmetry

Definition

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 seller's is usually in a more advantageous position because his or her store of information is based on numerous sales conducted over the years. A buyer's information, however, is based usually on an experience of only a few purchases. A similar situation exists between a commercial lender and a borrower.

Browse by Letter: # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z