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top   »  information   »  information economics   »  perfect information

What is Perfect Information?

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Perfect information is a basic assumption of many economic models that asserts that all market participants have the same information all the time. For example, if a company reports negative news, economic models might assume that everyone gets the news at the same time. Perfect information is essential to efficient market functioning but in real world situations, information is rarely perfect and markets tend to be inefficient. In most countries, market regulations attempt to make information disclosure fair and consistent.
Overview: Perfect Information
Type
Economics
Definition
All market participants receive the same information at the same time.
Value
Perfect information, or near perfect, is important to maintaining confidence in markets.
Related Concepts
Information Asymmetry

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