Asymmetric Information

From Open Risk Manual

Definition

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.

Examples

  • 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

Contributors to this article

» Wiki admin