managerialandindividualdecisionproblemsasymmetric管理和個人的決策問題的非對稱-全文預覽
【正文】 tput。 so principles expected payoff = 189。 ? the information about the agent is relevant to the principle’s evaluation of the transaction between them Adverse selection Adverse selection ? Examples – The riskiness of an investment for a venture capitalist (the principle) due to uncertainty about the effectiveness of new technology employed by an entrepreneur (the agent) – The riskiness of employing a new worker because uncertainty about their innate ability (productivity) – The state of health of someone buying health insurance ? If principle offers a contract that is based on expected quality this may only be acceptable to low quality agents ? ADVERSE SELECTION。D fails Mc Don’t invest M Probability = Probability = Should Dr Punter invest? What would be a sensible decision rule? Dr Punter’s decision Dr Punter Invest in Ramp。Section C – Managerial and individual decision problems ? Asymmetric information and risk – Main problems: adverse selection and moral hazard ? Applications and case studies: second hand car markets, the supply of health care, managerial incentives, hiring and contracting with employees Suggested background reading ? Allen et al. 2022. Managerial Economics. Norton. Part 7: Chapters 1315 ? Kreps, D. M. 2022. Microeconomics for Managers. Norton Chapters 1819 (1617 provide more background) ? Frank, R. H. 2022. Microeconomics and behaviour. McGraw Hill. Chapter 6 ? Wall,S., Minocha, S. and Rees, B. 2022. International Business, Pearson. Chapter 6 ? Grimes, P, Register, C. and Sharp, A. 2022. Economics of Social Issues, McGraw Hill. Chapter 15 ? Rasmusen, E. 2022. Games and Information, Blackwell. Chapters 79 Objectives ? By the end of this section you should be able to: – Characterise decision making under risk – Use detailed examples to explain what is implied by the concept of adverse selection. In the context of your example, discuss how the problems associated with adverse selection can be resolved. – Use detailed examples to explain what is implied by the concept of moral hazard. In the context of your example, discuss how the problems associated with moral hazard can be resolved. Risk ? Risk implies a chance of loss – . some exogenous chance of an investment failing as well as some chance it will succeed ? Need to incorporate probabilities into the decision problem – Probabilities may be known or only defined subjectively (uncertainty) 187。D succeeds M+w Ramp。D fails Mc Don’t invest M Expected value of payoff from investing = (M+w) + (Mc) Payoff from not investing = M (sure thing) So
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