Where does asymmetry collide?

In economics an information asymmetry is a transaction in which one party knows more, or knows better, than the other, and that gap shapes which deals get made. George Akerlof's The Market for "Lemons" (1970) showed that when sellers know a used car's quality but buyers cannot, the good cars are driven out and only the bad ones (the lemons) trade, a case of adverse selection. Michael Spence added that a better-informed party can pay for a costly, hard-to-fake action, such as a degree, to signal what it knows, while Joseph Stiglitz showed how the worse-informed party can screen and design contracts in response, and once a contract is signed, hidden action by the informed party creates moral hazard. The referent is the uneven spread of knowledge between people in a market, and the content is who knows what and how they act on it. This is a claim about minds and incentives in an exchange, not about matter in the early universe, the shape of a distribution, or the balance of force between armies.[1]

Unit

A gap in what each party to a trade knows

Recovery means

Signaling and screening can narrow the gap: a costly signal or a well-designed contract lets some of the hidden information cross between the parties

Measured by

Studied through market outcomes such as adverse selection, and through the signals and screening contracts that parties use to cope with the gap

In physics this asymmetry is the observed excess of matter over antimatter in the universe: the hot early cosmos should have made the two in nearly equal amounts, yet almost everything we see is matter and free antimatter is vanishingly rare. Canetti, Drewes, and Shaposhnikov, in Matter and antimatter in the universe (2012), review this baryon asymmetry and the conditions any explanation of it must meet. A necessary ingredient is CP violation, a small breaking of the symmetry between particles and their antiparticles, first seen by Christenson, Cronin, Fitch, and Turlay in Evidence for the 2π decay of the K20 meson (1964). The referent is a physical imbalance in the contents of the cosmos and in the laws that govern certain decays, measured as a ratio of leftover matter to radiation. What is claimed here is a fact about nature at the largest and smallest scales, and it has nothing to do with who holds information in a market, the tilt of a dataset, or a mismatch of military power.[2][3]

Unit

The excess of matter over antimatter, expressed as a matter-to-radiation ratio

Recovery means

Not applicable

Measured by

Quantified as the baryon-to-photon ratio of the universe, and probed in the laboratory by measuring CP violation in particle decays

In statistics skewness measures how lopsided a probability distribution is about its mean: a symmetric distribution has zero skewness, a long right tail gives positive skewness, and a long left tail gives negative skewness. Joanes and Gill, in Comparing measures of sample skewness and kurtosis (1998), lay out the standard formulas, all built from the third standardized moment, and compare how they behave in samples of different size. The referent is the shape of a distribution or of a batch of data, and skewness is a single number that summarizes its asymmetry. It says nothing about where the distribution sits or how wide it is, only about the direction and degree of the lean. This is a formal property computed from data, not a gap in knowledge, a cosmic excess of matter, or a difference in fighting strength.[4]

Unit

The third standardized moment of a distribution, its lean about the mean

Recovery means

Not applicable

Measured by

Computed from data as a sample skewness coefficient built from the third moment about the mean

In the study of war and conflict, asymmetry refers to a contest between sides of very unequal power, where the weaker party avoids the stronger one's strengths and fights on different terms, as in insurgency or guerrilla warfare. Ivan Arreguín-Toft, in How the Weak Win Wars (2001), studies such asymmetric conflicts and argues that the weaker side prevails more often than raw power would predict when the two sides adopt opposing strategic approaches. The referent is a real armed conflict and the spread of capability and strategy across its parties, described by its outcomes and by the methods each side uses. The interest is in why material superiority so often fails to settle these wars. This is a claim about power and strategy between opponents, and it is not about private information in a trade, the matter content of the universe, or the moments of a distribution.[5]

Unit

The gap in capability and strategy between the sides in a conflict

Recovery means

Not applicable

Measured by

Assessed by the relative power of the sides and the strategies they adopt, and by the recorded outcomes of asymmetric conflicts