Asymmetries of information are pervasive in economic relationships. For instance, buyers know their own willingness to pay but sellers do not, and citizens know their earning ability but the government does not. Informed agents have an incentive to manipulate their private information for their own gain. Uninformed agents must design schemes to provide the right incentives. This course analyzes moral hazard, mechanism design and signaling models. It uses techniques from game theory and contract theory. Applications include auctions, insurance, health care, corruption and poverty reduction. Format: seminar. Requirements: problem sets, midterm and final exam. Prerequisites: Economics 251. Enrollment limit: 20 (expected:10). Preference given to senior and junior Economics majors.

Hour: RAI