Information asymmetry is a situation where one party in a transaction has more or superior information than the other. This often happens in transactions where the seller knows more than the buyer, although the reverse can also be true. This creates an imbalance of power in transactions which can sometimes cause the transactions to go awry, a kind of market failure in the worst case.
Author Steven Levitt, working with journalist Stephen Dubner, shows how economic theories can be use...
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