An important type of information asymmetry is:
A)information withholding.
B)advantage imbalance.
C)moral hazard.
D)ethical constraint.

Question

Quizplus · Accepted Answer

Moral hazard is a type of information asymmetry where one party in a transaction has more information than the other, particularly in situations where actions that affect the transaction's outcome are not observable by the other party. This can lead to the better-informed party taking undue risks or acting in their own interest at the expense of the other party.

An Important Type of Information Asymmetry Is