Asymmetry Information

What is Asymmetry Information ?

- Asymmetry information, also know as information failure, it occurs when one party has proper knowledge about somethimg other party doesn't have, in other word it occurs when someone has improper knowledge.

BREAKING DOWN 'Asymmetric Information

Example 01 -

medical doctors knows more about medical practice than their patients. After all,  they have studied and trained doctors specialize in medicine, whereas most patients do not. The same principle applies to architects, teachers, police officers, attorneys, engineers, fitness instructors, and other specially trained professionals.

Example 02 -

when selling a car, the owner is likely to have full knowledge about its service history and it's current price value. The potential buyer, by contrast, will be in the dark and he may not be able to trust the car salesman.

Adverse Selection -

If a salesman selling a particular brand's bike and buyer doesn't have knowledge about bike, then he can only see the extrnals and not see the bike's features and it's capacity.

Life insurance company focus on such customers those are healthy, fit and young, they provide them better offers rather than giving to a old and ill persons.