Consider the case of asymmetric information, in which a seller may know that her product is high in quality but a buyer may not know it

To solve problems of market failure that arise from adverse selection, the negative effects of the asymmetry in the information available to buyers in comparison to sellers must be eliminated. The problem arises because the potential purchaser doesn't know the true worth and fair price of the product. Two different steps the seller might take to avoid adverse selection in the situation describe are as follows.

1. The seller could offer warranties, refunds and guarantees. While this doesn't eliminate the asymmetry in the information between the seller and buyer, it neutralizes the impact of it. The buyer can rest assured that he or she can trust that the product offered is of high quality. The risk that otherwise arises from lack of information about the product is removed.
2. The seller could create or participate in various types of performance review structures that eliminate the risk for the buyer. These could include the provision of website-posted references and product reviews by previous customers, and reliability ratings by independent groups such as the Better Business Bureau and industry rating services.