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Accelerator Application Strategy
Asymmetric Information
The economic concept where one party in a transaction has more or better information than the other, leading to risks like adverse selection and moral hazard. ✨
Article Points:
1
Occurs when one party knows more than the other in a deal.
2
Leads to two main problems: adverse selection (before the deal) and moral hazard (after the deal).
3
Mitigation strategies include signaling, screening, and aligning incentives.
4
Is a core concept in managerial economics, affecting everything from hiring to investing.
5
Examples include used car sales, insurance markets, and employee management.
6
Perfect information is rare; managing the asymmetry is key.
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Asymmetric Information
Asymmetric Information
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Source:
Asymmetric Information
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