Information that is known to some people but not to other people.
A situation in which one party to a transaction has information about the transaction to which the other party is not privy. Asymmetric information may result in a bad deal for one party (often but not always the buyer). To give an extreme example, the seller of real estate may know that his property is lined with land mines. This would ordinarily result in a (steep) drop in price, but if the buyer does not know this, it may not. Asymmetric information is not as prevalent as it once was because of increased transparency and legal requirements for disclosure, as well as better technology. Indeed, trading securities with asymmetric information is often illegal. See also: Insider trading, moral hazard, adverse selection.