An Introduction to the Economics of Information: Incentives and Contracts

Paperback | March 1, 2001

byInes Macho-Stadler, J. David Perez-CastrilloTranslated byRichard Watt

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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 thecondition 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 postgraduatestudents 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 arepresented 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.

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From the Publisher

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 thecondition of asymmetric information, under which ...

Ines Macho-Stadler is Professor of Economics and David Perez-Castrillo is Associate Professor of Economics at the Universitat Autonoma de Barcelona. They gained Ph.D.s in Economics from the Ecole Hautes Etudes en Sciences Sociales (Paris). J. David Perez-Castrillo is Associate Professor of Economics at the Universitat Autonoma de Bar...
Format:PaperbackPublished:March 1, 2001Publisher:Oxford University PressLanguage:English

The following ISBNs are associated with this title:

ISBN - 10:0199243255

ISBN - 13:9780199243259

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Extra Content

Table of Contents

1. Introduction2. The Base Model3. The Moral Hazard Problem4. The Adverse Selection Problem5. SignallingMathematical AppendixAdditional Exercises

Editorial Reviews

Review of the previous edition:`It is a timely contribution to the discipline of Economics as a whole and in particular to Information Economics.'Ian Jackson, Staffordshire University