The Economics of Information

In many markets, there is asymmetric information. In product markets, sellers might know more about the quality of the product than buyers. In labor markets, employees may hold private information with respect to their productivity. Likewise, in insurance markets potential customers may have an informational advantage with respect to the risks to which they are exposed. In credit markets, the choices made by debtors may be hard to observe for lenders. How do such informational frictions affect the behaviour of market participants and market outcomes? What role does the market structure play? What form will contractual arrangements take in such markets? Are there inefficiencies to which market participants might respond?

This course examines the effects of information in the context of product markets, labor markets, insurance markets, and credit markets.
The course is structured as follows:
I) Introduction to the Economics of Information
II) Product Markets, the Lemons Problem, and the Role of Reputation
III) Labor Markets, Efficiency Wages, and Unemployment
IV) Insurance Markets: Adverse Selection and Moral Hazard
V) Credit Markets, Credit Rationing, and the Role of Collateral

Course leader

Andreas Roider

Target group

Bachelor's level

Fee info

EUR 346: EU/EEA citizens
EUR 730: NON-EU/EEA citizens

Scholarships

No scholarships available

Register for this course
on course website