A difference in access to relevant knowledge is called:
A)an information symmetry
B)an information asymmetry
C)signalling
D)screening

Question

Quizplus · Accepted Answer

An information asymmetry is a difference in access to relevant knowledge between two parties in a transaction or relationship. One party may have more information or expertise than the other, which can lead to imbalances in power or advantage. This can be seen in various contexts, such as in financial markets, employment relationships, or medical diagnoses. Option A is incorrect because "information symmetry" implies that both parties have equal access to information, which is not the case in an asymmetry. Options C and D are related to mechanisms that parties may use to mitigate or overcome the effects of an information asymmetry, such as sending signals or screening potential partners, but they are not the same as the asymmetry itself.

A Difference in Access to Relevant Knowledge Is Called