Asymmetric information exists when both sides of a market approach perfect information.

Question

Quizplus · Accepted Answer

Asymmetric information exists when one side of the market (usually the seller) has more information than the other side (usually the buyer), leading to an unequal distribution of knowledge and potential for exploitation. In perfect information, both sides have access to all relevant information and can make fully informed decisions. Therefore, in a market with perfect information, asymmetric information does not exist.

Asymmetric Information Exists When Both Sides of a Market Approach