非对称信息 英文

Lying to a potential employer?
Education as a signal
• Low ability people will not graduate.
– Have to accept lower unskilled wage.
• High ability people will go to college if difference between skilled and unskilled wage exceeds cost of education • Two equilibrea are possible
– ‘Which’ reports,
Price Discrimination Through Asymmetric Information
• Charge a different price according to willingness to pay. • Some consumer’s may falsely believe a product is of a higher quality. • Own label product.
• Moral Hazard
– When an informed person has an advantage through an unobserved action. – An insured car driver drives faster.
Equalising information
• Screening
Employee safety with asymmetric information
• Employees in safer industries pay lower wages than in unsafe. • Safety statistics are reported at industry levels, not the firm level.
Tourist Trap Model
• Pure competitive market:
– All firms charge the same price. – A higher price results in zero demand.
• Imperfect information in a competitive market.
Unique or multiple equilibrea
c, Cost per diploma, $ Pooling equilibrium 20,000 Pooling or separating equilibrium c = wh – wl
15,000
x
y
5,000
z Separating equilis and good cars
(a) Market for Lemons Price of a lemon, $ (b) Market for Good Cars Price of a good car, $ SL
2,000 1,750 1,500 1,250 S2
Monopoly price in a ‘tourist trap’
• Suppose all firms charge p*+e
– Same reasoning implies all firms can raise price to p*+2e
• This argument can continue to be applied until all firms charge the monopoly price.
– Obtaining information about hidden characteristics. – Insurance. – Costly.
• Signalling
– Use of public information to indicate the nature of private information. – Restaurant.
c —— q = 1 – —— wh – wl
0
1 – 4
1 – 2
1 q, Share of high-ability workers
– Pooling
• When costs of education exceed the wage differential and everyone is paid the same.
– Seperating
• When it pays to go to college.
Pooling and separating equilibrea
E
DG
1,500
f
D*
F
D*
1,000 750
e
S1
DL
0
1,000 Lemons per year
0
1,000 Good cars per year
Preventing the occurrence of lemon markets
• Laws
– Product liability laws,
• Standards and certification,
– Kite marks,
• Consumer screening
– The use of a mechanic, – Reputation,
• Signalling by firms
– Brand names to differentiate product.
• Third party comparisons,
Asymmetric Information
Perloff Chapter 19
Asymmetric Information
• When two parties to a transaction have different information. • Adverse Selection
– When an informed person has an advantage through an unobserved characteristic. – Eg a disproportionately large number of unhealthy people buy life insurance.
– Know the prices charged by shops but not specific price charged by a specific shop. – Competitive price is p*. – Firm can charge p*+e. – e is less than cost of finding another shop.
– At this price further price increases result in a loss of profit.
• In a market where finding prices is costly the equilibrium price is the monopoly price. • If firms are allowed to advertise prices so that search costs disappear the competitive price results.