Apr 23 2012

Asymmetric Information

Published by at 2:21 pm under

When one party in an economic transaction knows information pertinent to the transaction that he or she withholds from the other party in an attempt to get a better deal for him or herself. For example, if a used car dealer knows that a car he’s selling has been in an accident, but does not reveal this to the buyer. Asymmetric information is a source of market failure, since in some markets resources will be mis-allocated due to asymmetric information.


About the author:  Jason Welker teaches International Baccalaureate and Advanced Placement Economics at Zurich International School in Switzerland. In addition to publishing various online resources for economics students and teachers, Jason developed the online version of the Economics course for the IB and is has authored two Economics textbooks: Pearson Baccalaureate’s Economics for the IB Diploma and REA’s AP Macroeconomics Crash Course. Jason is a native of the Pacific Northwest of the United States, and is a passionate adventurer, who considers himself a skier / mountain biker who teaches Economics in his free time. He and his wife keep a ski chalet in the mountains of Northern Idaho, which now that they live in the Swiss Alps gets far too little use. Read more posts by this author

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