90296 - INFORMATION ECONOMICS

Anno Accademico 2022/2023

  • Docente: Francesca Barigozzi
  • Crediti formativi: 6
  • SSD: SECS-P/01
  • Lingua di insegnamento: Inglese
  • Modalità didattica: Convenzionale - Lezioni in presenza
  • Campus: Bologna
  • Corso: Laurea Magistrale in Economics (cod. 8408)

Conoscenze e abilità da conseguire

At the end of the class, the student has a working knowledge of the basic tools and results derived in Information Economics. Specifically, the student is able to analyze: - adverse selection in markets and its possible remedies - adverse selection and moral-hazard in the Principal-Agent model

Contenuti

This is a course in Information Economics providing both introductory and advanced material on asymmetric information in markets and in Principal-Agent relationships, incentives, and the design of optimal contracts.

First, adverse selection in markets will be introduced, together with remedies to mitigate the inefficiencies it generates.

Then Principal-Agent models will be analyzed with either hidden information problems (adverse selection) or hidden action problems (moral hazard). The perspective is that of optimal contract design in presence of conflicting interests between parties (the contract designer, i.e. the principal, and the delegated agent).

Finally, a simple example of Mechanism Design will be presented.

Specific topics:

  1. Introduction to the economics of information.
  2. Markets under adverse selection (the market for lemons).
  3. Signaling and screening.
  4. Cheap-talk.
  5. Optimal risk-sharing.
  6. The Principal-Agent problem: contracts under moral hazard.
  7. The Principal-Agent problem: contracts under adverse selection and the Revelation Principle.
  8. More on contracts under adverse selection: (i) Type-dependent participation constraints; (ii) Multiple dimensions of adverse selection; (iii) Competition between principals: random participation versus bidimensional screening.
  9. The market for insurance
  10. Mechanism Design: the Clarke-Groves mechanism.

Testi/Bibliografia

- The market for lemons, signaling and screening: A.Mas-Colell, M.Whinston and J. Green, Microeconomic Theory, Oxford University Press, 1995, chap 13.

- Cheap Talk: R. Gibbons, A primer in game Theory, Pearson Education Limited [https://www.ibs.it/libri-inglese/editori/pearson-education-limited], 1992, chap 4.3A.

- The Revelation Principle: Laffont, J.J. and D. Martimort, The Theory of Incentives: The Principal-Agent Model, Princeton University Press, 2001, chap 2.

- Adverse selection and moral-hazard in contracts theory: Bolton P. and M. Dewatripont, Contract Theory, The MIT Press, 2005, chaps 2 (sections 2.1 and 2.3.3) and 4 (sections 4.1 and 4.2).

- Clarke-Groves mechanism: Varian, H., Microeconomic Analysis, III ed., Norton, 1992, a paragraph in chap 23.

Teaching materials provided by the lecturer available in Virtuale.

Metodi didattici

Lectures and students' presentations

Modalità di verifica e valutazione dell'apprendimento

A class presentation and a written exam (each accounting for the 50% of the final mark).

Grades are assigned as follows:

- <18: failed
- 18-23: sufficient
- 24-27: good
- 28-30: very good
- 30 Lode: excellent.

Strumenti a supporto della didattica

Slides prepared by the instructor, articles from scientific journals, students' class presentations.

Orario di ricevimento

Consulta il sito web di Francesca Barigozzi

SDGs

Lavoro dignitoso e crescita economica Imprese innovazione e infrastrutture

L'insegnamento contribuisce al perseguimento degli Obiettivi di Sviluppo Sostenibile dell'Agenda 2030 dell'ONU.