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.
The concept of perfect information has often been criticized by the various schools of heterodox economics.
Product Knowledge and Product Involvement as Moderators of the Effects of Information on Purchase Decisions: A Case Study Using the Perfect Information Frontier Approach
Jun 22, 1999; This study ascertains the extent to which consumers achieve highest value-for-money under different conditions. Perfect...