Information asymmetry occurs when parties have unequal knowledge relevant to an exchange. It can arise from experience rather than secrecy. In Akerlof’s used-car model, buyers’ inability to distinguish quality can discourage better-quality sellers and reduce trade; this is a conditional outcome, not a universal result.
- Entry typeKey concept
What these mean
Editorial orientation · Entry type
Key concept
Key concepts are the working vocabulary of the field: the terms that the models and tools rely on and that a decision about communication has to use precisely. Each entry defines the term and sends you to the brief or the self-guided audit where it is put to work.