平狄克微观经济学Markets with Asymmetric Information参考.ppt

Chapter 17 Chapter 17 Markets with Asymmetric Information Topics to be Discussed Quality Uncertainty and the Market for Lemons Market Signaling Moral Hazard The Principal-Agent Problem Managerial Incentives in an Integrated Firm Asymmetric Information in Labor Markets: Efficiency Wage Theory Introduction We can see what happens when some parties know more than others – asymmetric information Frequently a seller or producer knows more about the quality of the product than the buyer does Managers know more about costs, competitive position and investment opportunities than firm owners Quality Uncertainty and the Market for Lemons Asymmetric information is a situation in which a buyer and a seller possess different information about a transaction The lack of complete information when purchasing a used car increases the risk of the purchase and lowers the value of the car Markets for insurance, financial credit and employment are also characterized by asymmetric information about product quality The Market for Used Cars Assume Two kinds of cars – high quality and low quality Buyers and sellers can distinguish between the cars There will be two markets – one for high quality and one for low quality The Market for Used Cars High quality market SH is supply and DH is demand for high quality Low quality market SL is supply and DL is demand for low quality SH is higher than SL because owners of high quality cars need more money to sell them DH is higher than DL because people are willing to pay more for higher quality The Lemons Problem The Market for Used Cars Sellers know more about the quality of the used car than the buyer Initially buyers may think the odds are 50/50 that the car is high quality Buyers will view all cars as medium quality with demand DM However, fewer high quality cars (25,000) and more low quality cars (75,000) will now be sold Perceived demand will now shift The Lemons Problem The Market for Used Cars With asymmetric information: Low quality goods dri