The Economics of Asymmetric Information

Author: Brian Hillier

Publisher: Macmillan International Higher Education

ISBN: 1349254851

Category: Economics

Page: 208

View: 6490

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This book presents recent developments in the economics of asymmetric information. The problems of selection and moral hazard, with hidden actions or hidden information, are introduced by examining how they affect the market for investment finance. The ideas are then used to analyse the market for insurance, signalling and screening models of education, efficiency wages, industrial regulation, public procurement and auctions. Coverage is thorough while avoiding excessive mathematical detail. Diagrams and verbal reasoning make the ideas accessible to intermediate level undergraduate students and beyond.

Asymmetric Information in Financial Markets

Introduction and Applications

Author: Ricardo N. Bebczuk

Publisher: Cambridge University Press

ISBN: 9780521797320

Category: Business & Economics

Page: 159

View: 321

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Examination of the features and implications of asymmetric information in financial markets.

An Introduction to the Economics of Information

Incentives and Contracts

Author: Inés Macho-Stadler,J. David Pérez-Castrillo

Publisher: Oxford University Press on Demand

ISBN: 9780199243259

Category: Business & Economics

Page: 287

View: 1259

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In this revised second edition, An Introduction to the Economics of Information covers the consequences for the character and efficiency of the interaction between individuals and organizations when one party has more or better information on some aspect of the relationship. This is the condition of asymmetric information, under which the information gap will be exploited if, by doing so, the better-informed party can achieve some advantage. The book is written for a one-semester course for advanced undergraduates taking specialized course options, and for first-year postgraduate students of economics or business. After an introduction to the subject and the presentation of a benchmark model in which both parties share the same information throughout the relationship, chapters are devoted to the three main asymmetric information topics of Moral Hazard, Adverse Selection, and Signalling. The wide range of economic situations where the conclusions are applied includes such areas as finance, regulation, insurance, labour economics, health economics, and even politics. Each chapter presents the basic theory before moving on to applications and advanced topics. The problems are presented in the same framework throughout to allow easy comparison of the different results. This new edition incorporates extended exercises to test the student's understanding of the material, and to develop the tools and skills provided by the main text to solve other, original problems.

The Core of Economies with Asymmetric Information

Author: Ulrich Schwalbe

Publisher: Springer Science & Business Media

ISBN: 3642584772

Category: Business & Economics

Page: 147

View: 5869

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and should therefore constitute a part of every area of economic 3 theory. The spectrum covered by information economics today ranges from Stigler's search theory4 to industrial economics, including oligopoly theory, innovation, as well as research and develop 5 ment. However, the area information economics is most closely connected with is the theory of optimal contracts, mainly ana 6 lyzed in principal-agent models. Contract theory deals primar ily with the question of how optimal arrangements (contracts) for the purchase and sale of commodities and services between two or more agents should be structured. In these models, it is often assumed that the parties to the contract are informed differently or asymmetrically about relevant variables (e. g. the health of one party in the case of insurance contracts, or the effort in relation to employment contracts). As a result of this asymmetric in formation, phenomena such as moral hazard, adverse selection, signaling, and screening may arise. Frequently, results from con tract theory are referred to when making statements about the effects of asymmetric information on an economy. Models of this kind are often used to explain phenomena such as fixed wages or unemployment, among others. 7 However, such conclusions must be treated with caution for two reasons. In the first place, in these models, a contract (explicit or implicit) is determined by the solution of an optimization prob lem.

Quality Uncertainty and Perception

Information Asymmetry and Management of Quality Uncertainty and Quality Perception

Author: Lalit Wankhade,Balaji Dabade

Publisher: Springer Science & Business Media

ISBN: 9783790821956

Category: Business & Economics

Page: 115

View: 2205

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It has been observed that the studies of quality are pursued in various disciplines like economics, quality management, and marketing science, and are seen isolated. The treatments imparted to these studies are also different and has the backdrop of discipline in which the work has been pursued. The nature of isolation is equally seen when quality uncertainty and perceived quality were pursued separately without showing any inkling that these can be complimentary. Economist and Nobel Laureate, Akerlof (1970), wrote a seminal piece “The market for lemons: quality uncertainty and market mechanism”, where he described quality uncertainty due to information asymmetry. It refers to the fact that a party in a transaction may have more information than the other. This is information asymmetry. If the seller has more information than the buyer about the product quality, he/she may sell it, as if it is a high-quality product. In reality, it could be a low-quality product. The buyer does not have the information regarding the quality of the offered product. The market condition that led to this transaction is quality uncertainty due to information asymmetry.

The Economics of missing markets, information, and games

Author: Frank Hahu

Publisher: Oxford University Press

ISBN: N.A

Category: Business & Economics

Page: 511

View: 1118

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This collection of papers is the result of a Cambridge University study of the consequences of missing markets, asymmetric information, market-dependent information, strategic market situations, and the role of quantity signals. The contributors also consider the behavior of overlapping generation models and their macroeconomic implications, providing a useful reference text on most of the main issues of current interest to economic theorists.

An Economic Theorist's Book of Tales

Author: George A. Akerlof

Publisher: Cambridge University Press

ISBN: 9780521269339

Category: Business & Economics

Page: 196

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These essays explore what happens when a skilful economist makes unconventional assumptions. Economic theory has traditionally relied upon a tacit and 'classical' set of assumptions that have gradually acquired a life of their own in defining how economists write and how they justify economic models. Similarly, these assumptions have acquired an autonomous character: they guide the way economists think about the world. In consequence, consideration of alternative assumptions has become taboo. These essays are substantively and stylistically novel because they break these taboos and bring new assumptions into economic theory. The papers apply this adventurous approach to a wide range of issues - from insurance markets and trade in underdeveloped countries to unemployment and discrimination. Some of the essays derive the implications for economic markets of costly asymmetric information. Others explore the findings of other social sciences such as anthropology, psychology and sociology.

Asymmetric Information, Corporate Finance, and Investment

Author: R. Glenn Hubbard

Publisher: University of Chicago Press

ISBN: 0226355942

Category: Business & Economics

Page: 352

View: 7495

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In this volume, specialists from traditionally separate areas in economics and finance investigate issues at the conjunction of their fields. They argue that financial decisions of the firm can affect real economic activity—and this is true for enough firms and consumers to have significant aggregate economic effects. They demonstrate that important differences—asymmetries—in access to information between "borrowers" and "lenders" ("insiders" and "outsiders") in financial transactions affect investment decisions of firms and the organization of financial markets. The original research emphasizes the role of information problems in explaining empirically important links between internal finance and investment, as well as their role in accounting for observed variations in mechanisms for corporate control.

Information Economics

Author: Urs Birchler,Monika Bütler

Publisher: Routledge

ISBN: 1134190581

Category: Business & Economics

Page: 488

View: 908

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This new text book by Urs Birchler and Monika Butler is an introduction to the study of how information affects economic relations. The authors provide a narrative treatment of the more formal concepts of Information Economics, using easy to understand and lively illustrations from film and literature and nutshell examples. The book first covers the economics of information in a 'man versus nature' context, explaining basic concepts like rational updating or the value of information. Then in a 'man versus man' setting, Birchler and Butler describe strategic issues in the use of information: the make-buy-or-copy decision, the working and failure of markets and the important role of outguessing each other in a macroeconomic context. It closes with a 'man versus himself' perspective, focusing on information management within the individual. This book also comes with a supporting website (www.alicebob.info), maintained by the authors.

Expanding the Economic Concept of Exchange

Deception, Self-Deception and Illusions

Author: Caroline Gerschlager

Publisher: Springer Science & Business Media

ISBN: 9780792376255

Category: Business & Economics

Page: 263

View: 9529

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Exchange is a pervasive concept in everyday life, affecting phenomena as diverse as interpersonal relationships and market transactions. In addition, economists have used the concept in a highly specific and clearly delineated way. Against this background, Expanding the Economic Concept of Exchange sets out to expand the concept of exchange by crossing the boundaries laid down by economists and by examining the function played by deceptions, self-deceptions and illusions. The main motivation for expanding the concept of exchange was the realization that in the prototypical economic model deception is not taken into account. Hence, economists traditionally regard deception as some sort of irrationality, as a flaw in an otherwise perfectly rational process. Authors represented in this volume take a different approach examining deception as a constituent quality of exchange. This is shown by the contributions drawing on recent developments in economic theory, by those with an anthropological orientation, as well as by a contribution referring specifically to Adam Smith. An interrogation into deception is long overdue in economics. This volume prepares the ground for and makes the first contributions to explicitly acknowledging deceptions, self-deceptions and illusions as fundamental dimensions allowing us as economists to further research and develop the concept of change. A particular and perhaps unexpected focus of this volume lies on anthropology, because economics can clearly benefit from integrating selected results on deception from outside its expanding domain. It is primarily targeted at economists interested in institutional aspects of exchanges and social theory. In addition, the topic will find interested readers from anthropology, cultural studies, science studies, philosophy.

Versicherungsökonomie

Author: Peter Zweifel,Roland Eisen

Publisher: Springer-Verlag

ISBN: 3662107848

Category: Business & Economics

Page: 486

View: 3989

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Das Buch macht den Leser mit den zentralen Fragestellungen und dem analytischen Werkzeug der Versicherungsökonomik vertraut. Es führt Beiträge zur Nachfrage nach Versicherung, zum Angebot an Versicherung und der Versicherungsregulierung sowie zur Sozialversicherung in einer vereinheitlichten Darstellung zusammen, die bisher nur verstreut in Zeitschriften und Sammelbänden verfügbar waren. Es werden empirisch überprüfbare Voraussagen der Theorie abgeleitet und den Ergebnissen internationaler empirischer Forschung gegenübergestellt. Ausformulierte Folgerungen fassen den Stoff zusammen und erleichtern die Kontrolle des Wissensstands.

Economic Concepts for the Social Sciences

Author: Todd Sandler

Publisher: Cambridge University Press

ISBN: 9780521796774

Category: Business & Economics

Page: 285

View: 2909

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The primary purpose of this book is to present some of the key economic concepts that have guided economic thinking in the last century and to identify which of these concepts will continue to direct economic thought in the coming decades. This book is written in an accessible manner and is intended for a wide audience with little or no formal training in economics. It should also interest economists who want to reflect on the direction of the discipline and to learn concepts and achievements in other subfields. The author imparts his enthusiasm for the economic way of reasoning and its wide applicability. Through the abundant use of illustrations and examples, the author makes concepts understandable and relevant. Topics covered include game theory, the new institutional economics, market failures, asymmetric information, endogenous growth theory, general equilibrium, rational expectations, and others.

Contributions to Insurance Economics

Author: Georges Dionne

Publisher: Springer Science & Business Media

ISBN: 9401711682

Category: Business & Economics

Page: 524

View: 8116

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For a number of years, I have been teaching and doing research in the economics of uncertainty, information, and insurance. Although it is now possible to find textbooks and books of essays on uncertainty and in formation in economics and finance for graduate students and researchers, there is no equivalent material that covers advanced research in insurance. The purpose of this book is to fill this gap in literature. It provides original surveys and essays in the field of insurance economics. The contributions offer basic reference, new material, and teaching supple ments to graduate students and researchers in economics, finance, and insurance. It represents a complement to the book of readings entitled Foundations of Insurance Economics - Readings in Economics and Finance, recently published by the S.S. Huebner Foundation of Insurance Education. In that book, the editors (G. Dionne and S. Harrington) disseminate key papers in the literature and publish an original survey of major contributions in the field.

Phishing for Fools

Manipulation und Täuschung in der freien Marktwirtschaft

Author: George A. Akerlof,Robert J. Shiller

Publisher: Ullstein eBooks

ISBN: 3843713650

Category: Business & Economics

Page: 416

View: 6304

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Seit Adam Smith ist eine der zentralen Thesen der Wirtschaftswissenschaften, dass freie Märkte und freier Wettbewerb die besten Voraussetzungen für allgemeinen Wohlstand sind. Die Wirtschaftsnobelpreisträger George Akerlof und Robert Shiller argumentieren dagegen, dass Märkte nicht von sich aus gutartig sind und sich auch nicht immer die besten Produkte durchsetzen. Die Autoren behandeln in diesem Buch erstmals die zentrale Rolle von Manipulation und Täuschung in der Wirtschaft. Anhand von zahlreichen Fallbeispielen zeigen sie, wie wir verleitet werden, mehr Geld auszugeben, als wir haben; wie wir von Werbung stärker beeinflusst werden, als wir glauben; warum wir oft zu viel bezahlen und wie massiv die Politik durch Wirtschaft beeinflusst wird. Was ist besonders? Zwei Wirtschaftsnobelpreisträger widerlegen die These der selbstregulierenden Märkte. Wer liest? • Alle, die sich für Verhaltensökonomie, freie Marktwirtschaft oder Wirtschaftstheorie interessieren

The Economics of Risk and Insurance

Author: S. Hun Seog

Publisher: John Wiley & Sons

ISBN: 140518552X

Category: Business & Economics

Page: 343

View: 9415

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Written for advanced undergraduate and master?s level courses, this book builds from a base of asymmetric information issues to discuss a wide array of topics and is illustrated with some timely examples. Covers diverse issues such as risk aversion, expected utility, and moral hazard within the pure theory of insurance Provides a clear exposition of the necessary mathematics, a feature which cannot be found in readers on the topic Utilizes an undergraduate economics major level of math Uses the simplest economic models possible to keep the text intuitive Introduces more mathematically complex techniques such as basic optimization for students wishing to 'go further' in their analysis

Handbook of the Economics of Finance

Asset Pricing

Author: George M. Constantinides,Milton Harris,Rene M. Stulz

Publisher: Newnes

ISBN: 0444594736

Category: Business & Economics

Page: 872

View: 4298

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The 12 articles in this second of two parts condense recent advances on investment vehicles, performance measurement and evaluation, and risk management into a coherent springboard for future research. Written by world leaders in asset pricing research, they present scholarship about the 2008 financial crisis in contexts that highlight both continuity and divergence in research. For those who seek authoritative perspectives and important details, this volume shows how the boundaries of asset pricing have expanded and at the same time have grown sharper and more inclusive. Offers analyses by top scholars of recent asset pricing scholarship Explains how the 2008 financial crises affected theoretical and empirical research Covers core and newly developing fields

Economics of Asymmetric Information

Author: Dilip M. Nachane,Biswajit Chatterjee

Publisher: Deep and Deep Publications

ISBN: 9788176298261

Category: Information theory in economics

Page: 234

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Contributed papers presented at the one of the technical sessions of Indian Economic Association's 85th conference held at the Kerala University in 2002.

Selected Works of Joseph E. Stiglitz

Volume II: Information and Economic Analysis: Applications to Capital, Labor, and Product Markets

Author: Joseph E. Stiglitz

Publisher: Oxford University Press

ISBN: 0199533717

Category: Business & Economics

Page: 904

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The second in a series of six volumes containing a selection of Joseph Stiglitz's most important and widely cited work. Volume I set out the basic concepts underlying the economics of information. Volume II extends these concepts and applies them to a number of different settings in labour, capital, and product markets