Answered

In determining how material a piece of information is to each party of a contract, the value is not determined by the event itself, but solely by which of the following?

A. Truthfulness of such statements being made.
B. Interpretation that the seller places on such information in the agreement.
C. Amount of information that has been previously disclosed through the inquiry process.
D. Influence this information would have in forming an estimate of the advantages or the disadvantages of the contract.



Answer :

Final answer:

Information asymmetry impacts how valuable information is in contracts due to differing levels of knowledge between parties.


Explanation:

Information asymmetry is a key factor in determining the value of information in contracts. The significance lies in the party's ability to influence the contract's outcome as it is based on the information they possess. When one party has more information than the other, it leads to asymmetric information, impacting the honesty and value of information disclosed.


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