Information asymmetry arises where a contract distorts incentives to behave appropriately.

Name: Information asymmetry arises where a contract distorts incentives to behave appropriately.
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Information asymmetry refers to a situation where one party in a transaction has more or superior information compared to another. This does not inherently involve a contract distorting incentives but rather the imbalance of information itself.

Information Asymmetry Arises Where a Contract Distorts Incentives to Behave