The Economics of Information: Lying and Cheating in Markets and Organizations / Edition 1

The Economics of Information: Lying and Cheating in Markets and Organizations / Edition 1

by Ian Molho, Molho
     
 

Information is a key issuein decision making in economics and business. Being ‘in the know’ confers strategic advantages to people, allowing them to lie and/or cheat on their uninformed opponents. However, itis possible that all sides end up worse off in such situations, compared with the likely outcome under full information.

This new text is

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Overview

Information is a key issuein decision making in economics and business. Being ‘in the know’ confers strategic advantages to people, allowing them to lie and/or cheat on their uninformed opponents. However, itis possible that all sides end up worse off in such situations, compared with the likely outcome under full information.

This new text is designed to take students through the key issues to give an understanding of the impact of imperfect and asymmetric information in an economic context. At each stage Molho analyses and explains the key points using clear models that set the outcome under imperfect information against that under full information. The book is divided into four major sections covering:

  • Adverse selection.
  • Signalling.
  • Moral hazard.
  • Mechanical design under imperfect information.

Each section also covers experimental studies that test the predictions of theory. This text is aimed mainly at undergraduate students and gives an accessible introduction to this crucial area of economic theory.

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Product Details

ISBN-13:
9780631206668
Publisher:
Wiley
Publication date:
11/10/1997
Edition description:
New Edition
Pages:
276
Product dimensions:
9.00(w) x 6.00(h) x 0.62(d)

Table of Contents

List of Figures.

List of Tables.

Preface.

1. Introduction: Private Information and Hidden Action.

Part I: Adverse Selection: The Market for Lemons. .

2. Quality Uncertainty and the Market for Lemons.

3. Adverse Selection: The Wilson Model.

4. Lemons Problems: Experimental Evidence.

Part II: Signalling.

5. Job Market Signalling.

6. Screening: A Self-Selection Mechanism.

7. Further Literature on Signalling Theory.

8. Signalling/Screening Behaviour: Experimental Evidence.

Part III: Moral Hazard.

9. Moral Hazard: Shareholder/Management Relations.

10. Moral Hazard: A Principal-Agent Model.

11. Further Literature on Moral Hazard and Agency Theory.

12. Moral Hazard: Experimental Evidence.

Part IV: Mechanism Design: Applications to Bargaining andAuctions. .

13. Mechanism Design and the Revelation Principle: A BargainingExample.

14. Auction Design: Theory.

15. Auction Design: Experimental Evidence.

16. Concluding Comments.

Appendix: Brief Notes on Probability Distributions, Baye's Rule,Expected Utility Theory and Game Theory.

Index.

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