Asymmetric Information: Insights Across Economic and Market Contexts

Jiarui Liu

doi:10.54254/2754-1169/2025.21130

Research Article

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Published on 27 February 2025

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Liu,J. (2025). Asymmetric Information: Insights Across Economic and Market Contexts. Advances in Economics, Management and Political Sciences,166,148-154.

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Asymmetric Information: Insights Across Economic and Market Contexts

Jiarui Liu *^,1,

¹ The British School of Milan, Via Pisani Dossi Carlo Alberto, 16, Italy

* Author to whom correspondence should be addressed.

https://doi.org/10.54254/2754-1169/2025.21130

Abstract

Asymmetric information seeks to explain how uneven knowledge among different parties distorts markets, leading to inefficiency and even market failure. This essay examines asymmetric information as a key factor of influence in the market and explores some theoretical solutions, such as signaling and screening. The study demonstrates the benefits and limitations of these remedies through real-world examples, such as the quality gaps in the tourism industry and the reliance of e-commerce on product disclosures. Signaling helps the informed parties convey credibility, while screening assists the uninformed in obtaining crucial information. However, these mechanisms are not perfect and can have their own shortcomings. While signaling and screening mitigate the effects of asymmetric information, neither can fully resolve its consequences. The study also underscores that the problem of achieving efficient market outcomes persists due to asymmetric information.

Keywords

asymmetric information, signaling, screening, economic inefficiency

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Cite this article

Liu,J. (2025). Asymmetric Information: Insights Across Economic and Market Contexts. Advances in Economics, Management and Political Sciences,166,148-154.

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About volume

Volume title: Proceedings of the 4th International Conference on Business and Policy Studies

Conference website: https://2025.confbps.org/

ISBN：978-1-83558-961-8(Print) / 978-1-83558-962-5(Online)

Conference date: 20 February 2025

Editor：Canh Thien Dang

Series: Advances in Economics, Management and Political Sciences

Volume number: Vol.166

ISSN：2754-1169(Print) / 2754-1177(Online)

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