Editing Adverse selection (section)

===Adverse selection in business===

In business dealings, buyers and sellers often encounter information asymmetry. For example, manufacturers may generally be more accurate than suppliers in predicting demand for their products. Another example is the acquisition of a company in which senior management of the target company has a deeper understanding of the information and value of the company's intangible assets than the acquirer. However, most of the theoretical research on the contract between buyer and seller assumes that private information is unverifiable. Therefore, informed buyers can make arbitrary claims about subjective information parameters. Patrick (2014){{cn|date=November 2024}} believes that private information is verifiable in practice.