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What is adverse information?
One party in the transaction has more information about the quality of the product being sold than the other party. Either party will result in cases in under allocation of resources to the good/ service. when information asymmetry leads to the selection of unfavorable or risky choices. In markets with imperfect information, buyers may be more likely to purchase lower-quality or riskier goods or services because they cannot differentiate between high and low quality.