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Communication between parties that has no direct cost but may influence the decisions or belief of the recipient.

A situation where one party in a transaction has more or better information than the other. This often leads to problems like adverse selection and moral hazard, challenging efficient market outcomes.

A dilemma where one person or entity (the 'agent'), is able to make decisions that impact, or on behalf of, another person or entity: the 'principal'.

A strategy used by the less informed party to uncover hidden attributes or information from the more informed party.

The risk that one party has the opportunity to assume additional risks that negatively affect another party because the latter cannot adequately monitor the former's behavior.

The process by which one party (the 'sender') credibly conveys some information about itself to another party (the 'receiver').

Information that is known by everyone and that everyone knows is known by everyone. In decision-making, it often aligns individuals' expectations and actions.

A situation where each subsequent actor, based on observing others' actions, makes the same choice independent of their own private signal.

Occurs when one party in a negotiation has information that the other party lacks, leading to a selection of participants that the less informed party would not choose if it had better information.

A decision-making process for modeling choices under risk, where each outcome is weighted by its probability of occurrence and its utility to the decision-maker.

The extent to which market prices reflect all available, relevant information. Crucial for the efficient allocation of resources and market stability.

A situation where the quality of goods in the market degrades due to the presence of goods of lower quality (lemons) because of asymmetric information.

Refers to the ability of a policy to remain credible and optimal over time, even as information and economic conditions change.

Use of past performance and feedback as a way to establish trustworthiness in future transactions, often utilized in markets with asymmetric information.

The action by an informed party to reveal private information in a way that indirectly conveys that information to an uninformed party.

The time, energy, and financial costs incurred by consumers or firms in order to obtain more information about products or markets.

A preference for a sure outcome over a gamble with a higher or equal expected return. This impacts insurance decisions and portfolio management.

A field in economics that explores how economic institutions and market mechanisms can be designed to achieve desired objectives, given limitations of information.

A situation where the cost of educating oneself on an issue exceeds the potential benefit that the knowledge would provide.