Question

Depict information asymmetry using partitions using the numbers 1,2,3,4,5.

Answer 1

In economics Information asymmetry is,

1. Study of decisions, and tells about that one have more information than the other.

2. It creates an imbalance in the economy and can lead to market failure in long run.

3. It may extend to non–economic behaviour when a private entities will have more information than a regulator, then it will be hard to regulate private entities.

4. It is always goes against the notion of perfect information ( when all information available to all)

5. Media is an important source of information asymmetry.