Definition
- Imperfect information
- Imperfect information is when buyers or sellers do not have all the information necessary to make an informed decision about a product's price or quality.
Example
Can you think of an example of imperfect information?
Many smokers underestimate how likely cigarettes are to make them ill later in life, so they buy more than they would with the full facts.
Test yourself
Can you name the three causes that make a market get the quantity of a good wrong?
Learn it properly: the module
Also in: Asymmetric information