Leonid Hurwicz, Eric S. Maskin and Roger B. Myerson: Asymmetric Information and Economic Institutions
AbstractInformation for the Public, The Prize in Economic Sciences 2007. Buyers and sellers sometimes haggle too hard and therefore fail to trade. Desirable joint projects are sometimes not undertaken because the projects' beneficiaries fail to agree how the costs should be shared. Sickness insurance, for example, is typically criticized either for offering too little coverage or for inviting misuse. In either case, the basic problem is that people have an incentive to economize with their private information: some insurancy-policy sellers claim that their costs are high in order to increase the price; some beneficiaries of joint projects such as insurance-policy holders claim that their benefits are low in order to reduce their own contributions to the project; some well-insured workers claim that they are sick, in order to reduce their workload.
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Bibliographic InfoPaper provided by Nobel Prize Committee in its series Nobel Prize in Economics documents with number 2007-1.
Length: 6 pages
Date of creation: 15 Oct 2007
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Web page: http://www.nobelprize.org
asymmetric information; mechanism design;
Find related papers by JEL classification:
- D02 - Microeconomics - - General - - - Institutions: Design, Formation, and Operations
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-05-05 (All new papers)
- NEP-CTA-2008-05-05 (Contract Theory & Applications)
- NEP-IAS-2008-05-05 (Insurance Economics)
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