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

Question

Quizplus · Accepted Answer

Adverse selection is a type of information asymmetry where one party in a transaction has more or better information than the other party, typically the seller knows more about the product quality than the buyer. This can lead to market inefficiencies and is a well-recognized problem in economics and insurance markets.

An Important Type of Information Asymmetry Is