Economics of Information
0
2019-2020
02640317
Economics
Portuguese
Face-to-face
6.0
Elective
2nd Cycle Studies - Mestrado
Recommended Prerequisites
Basic knowledge of micro-economics
Teaching Methods
The classes start with the basic concepts, and then move on to applications and problems. The key concepts are initially presented in an intuitive way, and then mathematical models are used in order to allow a formal analysis. Students are encouraged to be active participants in the class, applying common sense and mathematical models to the analysis of different problems. Some simulations of asymmetric information situations will be performed in the classes, in order to provide the students a deeper understanding of the concepts, by applying them directly
Learning Outcomes
Students should be able to
- understand the basic concepts of game theory;
- understand the concepts of information and value of information, as well as the different aspects of information;
- identify the main categories of asymmetric information models;
- identify moral hazard and adverse selection situations;
- understand asymmetric information models applied to different real world situations;
- calculate optimal contracts in different situations;
- identify different types of auctions, and the way they influence the expected outcome for the seller;
- identify the optimal buyer strategies in different types of auctions.
Work Placement(s)
NoSyllabus
Basic concepts of game theory. The concept of information, the different aspects of information and the value of information. Categories of asymmetric information models. Moral hazard. Adverse selection. Signalling and screening. Applied models of asymmetric information: second-hand goods, contracts, insurance. Auctions.
Assessment Methods
Final assessment
Exam: 100.0%
Continuous assessment
Resolution Problems: 10.0%
Mini Tests: 10.0%
Tests: 80.0%
Bibliography
RASMUSEN – Games and information. 4th ed. Cambridge : Blackwell Publishing, 2007. [519.8 RAS]
OSBORNE – An introduction to game theory. New York : Oxford University Press, 2010. [519.8 OSB]
CAPMBELL – Incentives: motivation and the economics of information. 2nd ed. Cambridge : Cambridge University Press, 2006. [519.8 CAM]
BIRCHLER, Butler – Information economics. London : Routledge, 2009. [519.6 BIR]
MOLHO, Ian – The economics of information: lying and cheating in markets and organizations, Oxford, Blackwell Publishers, 1997. [BP 330.1 MOL]