Asymmetric Information

From Open Risk Manual


Asymmetric Information is an Information imbalance in a transaction in which one Counterparty possesses more or better information than another party or parties, such as knowledge of hidden issues, costs or risky behavior.


  • Borrowers have better information about their economic circumstances versus lenders
  • Buyers of insurance products typically have better information about their level of risk exposure than do the sellers of insurance.

See also