Asymmetric Information is the situation when one party in an economic transaction possesses more or better information about the product or service involved than the other party. The Asymmetry Information creates an imbalance of power in transactions, which can sometimes cause the transactions to be inefficient, causing market failure in the worst case. There are two types of Asymmetric Information: Adverse Selection (less-informed party making choices that are unfavourable or risky), and Moral Hazard (lead to risky or undesirable behaviour by the less-informed party)
Related Definitions in the Project: The Project Administration; Project Management; Commercial Definitions
