Asymmetric Information

Information asymmetry is a condition in price formation and economics transactions where one party has more or better information than the other. This asymmetry creates an imbalance of power in transactions. This can lead to moral hazard or entire markets to be inefficient.

See also broker, front running and market manipulation.


  1. Akerlof, George A. "The market for “lemons”: Quality uncertainty and the market mechanism." In Uncertainty in economics, pp. 235-251. Academic Press, 1978.