If a buyer in an economic transaction has more information than the seller, the buyer benefits at the expense of the seller.This phenomenon is due to

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Adverse selection occurs when one party in a transaction has more information than the other, leading to an imbalance of power and potential exploitation of the less informed party. In this case, the buyer benefits at the expense of the seller because they have more information about the product or service being exchanged. Moral hazard refers to the situation where one party takes on more risk because they know the consequences will be borne by the other party, which is not directly relevant to this question. Economically irrational behavior simply means making decisions that go against economic logic, which may or may not apply here. Gains from trade refer to the overall benefit that both parties can receive when engaging in mutually beneficial exchanges, which may or may not apply depending on the specific circumstances of the transaction.

If a Buyer in an Economic Transaction Has More Information