Economics of information: lying and cheating in markets and organizations
- Oxford Blackwell Publishers 1997
- 262p.
Information is a key issue in 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, it is possible that all sides end up worse off in suck 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 i divided into four major sections covering:
Adverse selection
Signaling
Moral hazard
Mechanical design under imperfect information
Each section also covers experimental studies that test the prediction of theory. This text is aimed mainly at undergraduate students and gives an accessible introduction to this crucial area of economic theory.