This dissertation attempts to provide a framework for understanding information asymmetry in markets by verifying the economic incentives for sellers with low-quality products to fully disclose their types, through analytic models, experimental analysis, and market data analysis. This study achieves this goal by focusing on how risk intermediaries such as third-party certifications can reduce the perceived risk of customers and encourage sellers to voluntarily reveal weaknesses of their products or services. Essay 1 explains whether, when, and how a seller with a low-quality product can disclose quality information to enhance his profitability and also increase the market demand through an analytic model and lab experiments. Essay 2 confirms the predictions of Essay 1 by verifying the economic incentives to disclose low-quality information from the sales data of various collectible items, and also shows that revealing weaknesses helps sellers more when they are selling products of higher than average quality, and that this incentive for information disclosure differs across different market circumstances. Essay 3 explicitly investigates the effect of certifications of different qualities on various market outcomes through an analytic model and an economic experiment and finds that an inaccurate certification is worse than no certification for sellers but beneficial to buyers. This essay also shows that using certification and fully disclosing quality information is the best way to increase profit under information asymmetry. Overall, this dissertation aims to contribute to both academia and industry through presenting an important theoretical basis and empirical evidences regarding various market dilemmas under information asymmetry, as it is one of the first attempts to analyze the economic incentives for sellers with low-quality products to reveal their types and understand how to design an optimal certification system to solve adverse selection issues.