Asymmetric information

This refers to the situation where one party in a transaction has a greater amount of information about an organisation than another party.

In these cases one party has an advantage in the transaction, for example knowing the true value of an item for sale, This could be where the seller knows goods are of lower quality, and therefore less value, than the buyer believes; or where the buyer has advance knowledge of circumstances which could lead to a shortage they could use this information to buy up stock cheaply.

Asymmetric information is a term normally found in business economics.

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