Situations often arise in which people are not sure about what kind of person they are dealing with. These are games of incomplete information, where players are uncertain about the characteristics of the other player and so are uncertain about the payoffs from the possible outcomes of the game. Often this is represented by thinking of the other player as having a type. Each type is associated with different payoffs from the possible outcomes of the game. A player typically knows his or her own type, but it is unknown to the other player. Hence there is asymmetric information.
