Perfect Information
a characteristic of a situation in which all data relevant to a problem is known. Numbers are available for all variables necessary for a solution, through some of the numbers may be the result of estimates rather than measurements. "Perfect" in this context refers to completeness with no implied judgment about quality. (Umpleby ) | ||||
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Perfect information Definition from Encyclopedia Dictionaries & Glossaries
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Perfect information
Perfect information is a term used in economics and game theory to describe a state of complete knowledge about the actions of other players that is instantaneously updated as new information arises.
Chess and Go are canonical examples of games with perfect information, in contrast to, for example, the prisoner's dilemma.
In microeconomics, a state of perfect information is required for perfect competition. That is, assuming that all agents are rational and have perfect information, they will choose the best products, and the market will reward those who make the best products with higher sales. Perfect information would practically mean that all consumers know all things, about all products, at all times, and therefore always make the best decision regarding purchase. In competitive markets, unlike game-theoretic models, perfect competition does not require that agents have complete knowledge about the actions of others; all relevant information is reflected in prices.
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