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Thought Stack: Design Principles, Mental Models, & Cognitive Biases

Jun 19, 2017

The concept of information asymmetry seems fairly obvious from its name. However, as a mental model, it deserves deeper study to fully understand all of its nuances.

At its most basic, information asymmetry describes a situation where two parties have different quantities or qualities of information. When one person has either more or better information than another, they have a massive advantage.

This mental model shows up a lot in investing, but can be applied in many areas of life.

For example, I remember being intuitively aware of information asymmetry during my poker days, despite not knowing the concept by name.

Be sure to check out the in-depth article on