Information asymmetry and product valuation: an exploratory study

Abstract

This paper reports on the impact of information asymmetry on product valuation. One group of subjects was provided with symmetric information, while a different group was given asymmetric information; the subjects were then asked to value an information technology product. The study found that there was a significant difference in the valuations of the two groups. The group with the symmetric information valued the product highly and in close proximity to the real worth of the product, while the group with asymmetric information undervalued the product. The current study offers a new perspective for information science and an interesting avenue for future research, which, if pursued, can enrich our understanding of human information interaction and valuation processes.