When the parties to a transaction have different levels of knowledge about each other and/or the nature and implications of the transaction, it is said that there exists __________ information.

Question

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Asymmetric information refers to a situation where one party to a transaction has more or better information than the other party. This can lead to an imbalance in the transaction, where the party with more information has an advantage.

When the Parties to a Transaction Have Different Levels of Knowledge