Chapter Introduction
EM-
ENRICHMENT MODULE C
The Economics of Information
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In this Module, you will learn to:
Identify the special problems posed by information that some people have and other people do not, which is known as private information or asymmetric information
Explain how information asymmetries can lead to the problem of adverse selection
Discuss ways that firms can deal with imperfect information using screening and signaling
Explain how information asymmetries can lead to the problem of moral hazard