Information Asymmetry | Software.Land

Information Asymmetry


Information Asymmetry exists all around us. Everyone knows something that others don’t. This phenomenon exists with groups as well and that’s where the impacts become interesting.

Information Asymmetry is when one individual or group knows information (especially when this information is of significant value) that another individual or group doesn’t. One meaningful example in society is when one group has valuable information about a company that will affect its performance in the stock market. Another example is when a professor provides information in a class (that is, more pertinently, on an exam) to some students that does not exist in the course textbook or other material (that is used by all students). Both of these examples create an uneven playing field.

Impact At Various Levels


The largest groups in human civilization are nations (and organized groups of nations). At this highest level, Information Asymmetry is often encouraged as a means of furthering global hegemonic goals. Societies use educational institutions like universities to restrict the flow of information outside its walls. They may also restrict internal opportunities to students who are affiliated with non-friendly nations.

Software.Land supports the free sharing of information as much as possible. Rather than keeping information secretive in order to maintain relative power, let’s share information and help as many others grow as possible so that they may become customers and good problem solvers. The converse argument to this is that we need to maintain a security perimeter around information. This is true, but that class of information needs to be clearly defined and communicated. Too many individuals take it upon themselves to create their own barriers against information sharing with individuals from non-friendly nations, even when the information is not classified or restricted. This can cause friction. Furthermore, these barriers may be raised against anyone who is different in a number of ways.


Information Asymmetry reduces social mobility and increases wealth disparity.


The below two subheadings examine Information Asymmetry within a workplace.


There’s a level of vulnerability that needs to be revealed if one developer asks their teammate for information. This vulnerability is raised if the asking developer is more senior (less if the domain is specific to the less senior dev). Tools like company-internal StackOverflow deployments, search engines for documentation, and other mechanisms for making the recording and sharing of information easier can reduce this vulnerability. The most trust-worthy documentation is source code.


It’s very common for information to be siloed within teams. This is often more than just enforcing a security perimeter — it can be a mechanism of protecting relative status and position.

Solutions to this problem require more targeted methods of recording and sharing information.


If knowledge is power, then what’s the difference between knowledge and information? Information is raw data and facts, while knowledge is the understanding and application of that information (i.e. skills). Many confuse the former for the latter. This should be no surprise since much of Academia today focuses on the regurgitation of information, rather than critical thinking. A strong argument can be made that knowledge is to know, therefore no different to information, but in the context of the phrase knowledge is power, understanding and applying that knowledge equates to skills.

If you think of people as machines with a CPU and persistent storage, critical thinking is the CPU. Information is something that is stored in our persistent storage. There’s nothing special about this locally stored information. This becomes more evident over time as information becomes more readily available. Furthermore, as we develop more efficient forms of interfacing with remote sources of information, the value of locally stored information falls even further. Just as we can search the internet for information, machines can make network requests to remote machines. Currently, the main factor that gives locally stored information so much value is our limited ability to interact efficiently with remote machines, primarily due to our reliance on basic interfaces like screens and keyboards.

The converse argument is that we want to value higher-capacity information stores evolutionarily, but I think this is a lost battle vs artificial stores of information.

Security Implications

Lack of Information Asymmetry can cause problems in the realm of security by leaking information to those who shouldn’t have it. Security perimeters should be established, communicated, and implemented in any information-sharing tool.


Information Asymmetry is desirable only where security perimeters exist. In all other contexts, the free flow of information benefits everyone. However, fixed-pie mentality can result in raising artificial barriers to information. This is a constant battle.

Updated: 2024-02-02


Sam Malayek

Sam Malayek works in Vancouver, using this space to fill in a few gaps. Opinions are his own.