information asymmetry is a concept in economics and contract theory. it says that in any given contract the two parties of the contract do not have the same information. information economics is a field of science that looks at some of the problems that result from this bias. neoclassical economics assumes there is perfect information: all the actors know all the states of their environment; they can also observe what all the other actors do. information is free -it has no cost in the economic sense. this is also true for the ability to observe the other parties.