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The course provides an overview of the issues arising in the economics of information. We cover the problems of moral hazard, adverse selection and signalling. Understanding how private information and incentives in these problems interact is a prerequisite for understanding many of the problems in labour and financial markets as well as in the field of politics. We also cover problems related to externalities and some auction theory.
After the course, the student should:
- Be familiar with main problems in the economics of information as well as the standard modelling techniques.
- Understand the mechanisms behind standard problems of information economics: adverse selection, moral hazard and signalling