Chapter Thirty-Six Asymmetric Information 不对称信息
Chapter Thirty-Six Asymmetric Information 不对称信息
Information in Competitive markets In purely competitive markets all agents are fully informed about traded commodities and other aspects of the market What about markets for medical services, or insurance, or used cars?
Information in Competitive Markets In purely competitive markets all agents are fully informed about traded commodities and other aspects of the market. What about markets for medical services, or insurance, or used cars?
Asymmetric Information in Markets a doctor knows more about medical services than does the buyer. An insurance buyer knows more about his riskiness than does the seller a used car's owner knows more about it than does a potential buyer
Asymmetric Information in Markets A doctor knows more about medical services than does the buyer. An insurance buyer knows more about his riskiness than does the seller. A used car’s owner knows more about it than does a potential buyer
Asymmetric Information in Markets Markets with one side or the other imperfectly informed are markets with imperfect information(不完全信 息 Imperfectly informed markets with one side better informed than the other are markets with asymmetric information(不对称信息)
Asymmetric Information in Markets Markets with one side or the other imperfectly informed are markets with imperfect information(不完全信 息). Imperfectly informed markets with one side better informed than the other are markets with asymmetric information(不对称信息)
Asymmetric Information in Markets In what ways can asymmetric information affect the functioning of a market? Four applications will be considered: adverse selection(逆向选择) signaling(信号传递) moral hazard(道德风险) incentives contracting
Asymmetric Information in Markets In what ways can asymmetric information affect the functioning of a market? Four applications will be considered: adverse selection (逆向选择) signaling (信号传递) moral hazard (道德风险) incentives contracting
Adverse selection Consider a used car market Two types of cars;"lemons"and “ peaches” Each lemon seller will accept $1, 000; a buyer will pay at most $1, 200 Each peach seller will accept $2,000 a buyer will pay at most $ 2, 400
Adverse Selection Consider a used car market. Two types of cars; “lemons” and “peaches”. Each lemon seller will accept $1,000; a buyer will pay at most $1,200. Each peach seller will accept $2,000; a buyer will pay at most $2,400
Adverse selection If every buyer can tell a peach from a lemon then lemons sell for between $1, 000 and $1, 200, and peaches sell for between $2,000 and $2, 400. Gains-to-trade are generated when buyers are well informed
Adverse Selection If every buyer can tell a peach from a lemon, then lemons sell for between $1,000 and $1,200, and peaches sell for between $2,000 and $2,400. Gains-to-trade are generated when buyers are well informed
Adverse selection Suppose no buyer can tell a peach from a lemon before buying What is the most a buyer will pay for any car?
Adverse Selection Suppose no buyer can tell a peach from a lemon before buying. What is the most a buyer will pay for any car?
Adverse selection Let q be the fraction of peaches 1-g is the fraction of lemons Expected value to a buyer of any car is at most EV=$1200(1-q)+$2400q
Adverse Selection Let q be the fraction of peaches. 1 - q is the fraction of lemons. Expected value to a buyer of any car is at most EV = $1200(1− q) + $2400q
Adverse selection Suppose EV> $2000 Every seller can negotiate a price between $2000 and sev(no matter if the car is a lemon or a peach) All sellers gain from being in the market
Adverse Selection Suppose EV > $2000. Every seller can negotiate a price between $2000 and $EV (no matter if the car is a lemon or a peach). All sellers gain from being in the market