imperfect information

In mathematics, "imperfect information" refers to situations where players in a game do not have complete knowledge of all aspects of the game. This contrasts with "perfect information" games, such as chess, checkers, or go, where all players have access to all previous moves and the current state of the game. In games of imperfect information, a "saddlepoint" represents the optimal outcome that rational players would choose, though it may not always exist.1

A key concept related to imperfect information is "asymmetric information" in economics, where one party in a transaction possesses more knowledge than the other. This can lead to market inefficiencies, as seen in the example of the secondhand car market where sellers know more about a car's quality than buyers. This area of study, known as information economics, highlights how differing levels of knowledge can significantly impact economic behavior and market outcomes.2