What is payoff asymmetry?

Lenders can lose heavily if firm does poorly, but do not directly share in gains if firm does well.

Paying bonuses to some employees but not all.

Equity investors earning more than debt investors.

Management has more information than investors.

What is payoff asymmetry? Lenders can lose heavily if firm does poorly, but do not directly share in gains if firm does well Paying bonuses to some employees but not all Equity investors earning more thairit debt investors Management has more information than investors