Adverse Selection
In economics, insurance, and risk management, adverse selection is a market situation where Information asymmetry, asymmetric information results in a party taking advantage of undisclosed information to benefit more from a contract or trade. In an ideal world, buyers should pay a price which reflects their willingness to pay and the value to them of the product or service, and sellers should sell at a price which reflects the quality of their goods and services. However, when one party holds information that the other party does not have, they have the opportunity to damage the other party by maximizing self-utility, concealing relevant information, and perhaps even lying. This opportunity has secondary effects: the party without the information may take steps to avoid entering into an unfair contract, perhaps by withdrawing from the interaction; a party may ask for higher or lower prices, diminishing the volume of trade in the market; or parties may be deterred from participatin ... [...More Info...]       [...Related Items...]     OR:     [Wikipedia]   [Google]   [Baidu]   |
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Economics
Economics () is a behavioral science that studies the Production (economics), production, distribution (economics), distribution, and Consumption (economics), consumption of goods and services. Economics focuses on the behaviour and interactions of Agent (economics), economic agents and how economy, economies work. Microeconomics analyses what is viewed as basic elements within economy, economies, including individual agents and market (economics), markets, their interactions, and the outcomes of interactions. Individual agents may include, for example, households, firms, buyers, and sellers. Macroeconomics analyses economies as systems where production, distribution, consumption, savings, and Expenditure, investment expenditure interact; and the factors of production affecting them, such as: Labour (human activity), labour, Capital (economics), capital, Land (economics), land, and Entrepreneurship, enterprise, inflation, economic growth, and public policies that impact gloss ... [...More Info...]       [...Related Items...]     OR:     [Wikipedia]   [Google]   [Baidu]   |
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Quarterly Journal Of Economics
''The Quarterly Journal of Economics'' is a peer-reviewed academic journal published by the Oxford University Press for the Harvard University Department of Economics. Its current editors-in-chief are Robert J. Barro, Lawrence F. Katz, Nathan Nunn, Andrei Shleifer, and Stefanie Stantcheva. History It is the oldest professional journal of economics in the English language, and second-oldest in any language after the . It covers all aspects of the field—from the journal's traditional emphasis on micro-theory to both empirical and theoretical macroeconomics. Reception According to the ''Journal Citation Reports'', the journal has a 2015 impact factor of 6.662, ranking it first out of 347 journals in the category "Economics". It is generally regarded as one of the top 5 journals in economics, together with the '' American Economic Review'', ''Econometrica'', the '' Journal of Political Economy'', and '' The Review of Economic Studies''. Notable papers Some of the most inf ... [...More Info...]       [...Related Items...]     OR:     [Wikipedia]   [Google]   [Baidu]   |
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Capital Market
A capital market is a financial market in which long-term debt (over a year) or equity-backed securities are bought and sold, in contrast to a money market where short-term debt is bought and sold. Capital markets channel the wealth of savers to those who can put it to long-term productive use, such as companies or governments making long-term investments. Financial regulators like Securities and Exchange Board of India (SEBI), Bank of England (BoE) and the U.S. Securities and Exchange Commission (SEC) oversee capital markets to protect investors against fraud, among other duties. Transactions on capital markets are generally managed by entities within the financial sector or the treasury departments of governments and corporations, but some can be accessed directly by the public. As an example, in the United States, any American citizen with an internet connection can create an account with TreasuryDirect and use it to buy bonds in the primary market. However, sales to in ... [...More Info...]       [...Related Items...]     OR:     [Wikipedia]   [Google]   [Baidu]   |
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Screening Games
A screening game is a two-player principal–agent type game used in economic and game theoretical modeling. Principal–agent problems are situations where there are two players whose interests are not necessarily matching with each other, and where complete honesty is not optimal for one player. This will lead to strategies where the players exchange information based in their actions which is to some degree noisy. This ambiguity prevents the other player from taking advantage of the first. The game is closely related to signaling games, but there is a difference in how information is exchanged. In the principal-agent model, for instance, there is an employer (the principal) and a worker (the agent). The worker has a given skill level, and chooses the amount of effort he will exert. If the worker knows his ability (which is given at the outset, perhaps by nature), and can acquire credentials or somehow signal that ability to the employer before being offered a wage, then the ... [...More Info...]       [...Related Items...]     OR:     [Wikipedia]   [Google]   [Baidu]   |
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Reputation System
A reputation system is a program or algorithm that allow users of an online community to rate each other in order to build trust (social sciences), trust through reputation. Some common uses of these systems can be found on E-commerce websites such as eBay, Amazon.com, and Etsy as well as online advice communities such as Stack Exchange. These reputation systems represent a significant trend in "decision support for Internet mediated service provisions". With the popularity of online communities for shopping, advice, and exchange of other important information, reputation systems are becoming vitally important to the online experience. The idea of reputation systems is that even if the consumer can't physically try a product or service, or see the person providing information, that they can be confident in the outcome of the exchange through trust built by recommender systems. Collaborative filtering, used most commonly in recommender systems, are related to reputation systems in ... [...More Info...]       [...Related Items...]     OR:     [Wikipedia]   [Google]   [Baidu]   |
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Credence Good
Economists and marketers use the Search, Experience, Credence (SEC) classification of goods and services, which is based on the ease or difficulty with which consumers can evaluate or obtain information. These days most economics and marketers treat the three classes of goods as a continuum. Archetypal goods are: *Search goods: those with attributes that can be evaluated prior to purchase or consumption. Consumers rely on prior experience, direct product inspection and other information search activities to locate information that assists in the evaluation process. Most products fall into the search goods category (e.g. clothing, office stationery, home furnishings). *Experience goods: those that can be accurately evaluated only after the product has been purchased and experienced. Many personal services fall into this category (e.g. restaurant, hairdresser, beauty salon, theme park, travel, holiday). *Credence goods: those that are difficult or impossible to evaluate even after consu ... [...More Info...]       [...Related Items...]     OR:     [Wikipedia]   [Google]   [Baidu]   |
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Personal Loan
In finance, unsecured debt refers to any type of debt or general obligation that is not protected by a guarantor, or collateralized by a lien on specific assets of the borrower in the case of a bankruptcy or liquidation or failure to meet the terms for repayment. Unsecured debts are sometimes called signature debt or personal loans. These differ from secured debt such as a mortgage, which is backed by a piece of real estate. In the event of the bankruptcy of the borrower, the unsecured creditors have a general claim on the assets of the borrower after the specific pledged assets have been assigned to the secured creditors. The unsecured creditors usually realize a smaller proportion of their claims than the secured creditors. In some legal systems, unsecured creditors who are ''also'' indebted to the insolvent debtor are able (and, in some jurisdictions, required) to set off the debts, so actually putting the unsecured creditor with a matured liability to the debtor in a pre-p ... [...More Info...]       [...Related Items...]     OR:     [Wikipedia]   [Google]   [Baidu]   |
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Myerson–Satterthwaite Theorem
The Myerson–Satterthwaite theorem is an important result in mechanism design and the economics of asymmetric information, and named for Roger Myerson and Mark Satterthwaite. Informally, the result says that there is no efficient way for two parties to trade a good when they each have secret and probabilistically varying valuations for it, without the risk of forcing one party to trade at a loss. The Myerson–Satterthwaite theorem is among the most remarkable and universally applicable negative results in economics—a kind of negative mirror to the fundamental theorems of welfare economics. It is, however, much less famous than those results or Arrow's earlier result on the impossibility of satisfactory electoral systems. Notation There are two agents: Sally (the seller) and Bob (the buyer). Sally holds an item that is valuable for both her and Bob. Each agent values the item differently: Bob values it as v_B and Sally as v_S. Each agent knows his/her own valuation with c ... [...More Info...]       [...Related Items...]     OR:     [Wikipedia]   [Google]   [Baidu]   |
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Eric Maskin
Eric Stark Maskin (born December 12, 1950) is an American economist and mathematician. He was jointly awarded the 2007 Nobel Memorial Prize in Economic Sciences with Leonid Hurwicz and Roger Myerson "for having laid the foundations of mechanism design theory". He is the Adams University Professor and Professor of Economics and Mathematics at Harvard University. Until 2011, he was the Albert O. Hirschman Professor of Social Science at the Institute for Advanced Study, and a visiting lecturer with the rank of professor at Princeton University.Economics professor wins Nobel – The Daily Princetonian Early life and education Maskin was born in[...More Info...]       [...Related Items...]     OR:     [Wikipedia]   [Google]   [Baidu]   |
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Roger Myerson
Roger Bruce Myerson (born March 29, 1951) is an American economist and professor at the University of Chicago. He holds the title of the David L. Pearson Distinguished Service Professor of Global Conflict Studies at The Pearson Institute for the Study and Resolution of Global Conflicts in the Harris School of Public Policy Studies, Harris School of Public Policy, the Griffin Department of Economics, and the College of the University of Chicago. Previously, he held the title The Glen A. Lloyd Distinguished Service Professor of Economics. In 2007, he was the winner of the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel with Leonid Hurwicz and Eric Maskin for "having laid the foundations of mechanism design theory". He was elected a Member of the American Philosophical Society in 2019. Biography Roger Myerson was born in 1951 in Boston into a Jews, Jewish family. He attended Harvard University, where he received his Bachelor of Arts, A.B., ''summa cum laude'', ... [...More Info...]       [...Related Items...]     OR:     [Wikipedia]   [Google]   [Baidu]   |
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Moral Hazard
In economics, a moral hazard is a situation where an economic actor has an incentive to increase its exposure to risk because it does not bear the full costs associated with that risk, should things go wrong. For example, when a corporation is insured, it may take on higher risk knowing that its insurance will pay the associated costs. A moral hazard may occur where the actions of the risk-taking party change to the detriment of the cost-bearing party after a financial transaction has taken place. Moral hazard can occur under a type of information asymmetry where the risk-taking party to a transaction knows more about its intentions than the party paying the consequences of the risk and has a tendency or incentive to take on too much risk from the perspective of the party with less information. One example is a principal–agent approach (also called agency theory), where one party, called an agent, acts on behalf of another party, called the principal. However, a principa ... [...More Info...]       [...Related Items...]     OR:     [Wikipedia]   [Google]   [Baidu]   |
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Private Information
Privacy (, ) is the ability of an individual or group to seclude themselves or information about themselves, and thereby express themselves selectively. The domain of privacy partially overlaps with security, which can include the concepts of appropriate use and Information security, protection of information. Privacy may also take the form of bodily integrity. Throughout history, there have been various conceptions of privacy. Most cultures acknowledge the right of individuals to keep aspects of their personal lives out of the public domain. The right to be free from unauthorized invasions of privacy by governments, corporations, or individuals is enshrined in the privacy laws of many countries and, in some instances, their constitutions. With the rise of technology, the debate regarding privacy has expanded from a bodily sense to include a digital sense. In most countries, the right to digital privacy is considered an extension of the original right to privacy, and many count ... [...More Info...]       [...Related Items...]     OR:     [Wikipedia]   [Google]   [Baidu]   |