EC30610 - UNCERTAINTY AND ASYMMETRIC INFORMATION

Module Identifier

EC30610

Module Title

UNCERTAINTY AND ASYMMETRIC INFORMATION

Academic Year

2003/2004

Co-ordinator

Mr Roberto Bonilla

Semester

Semester 2

Pre-Requisite

EC30230

Course delivery

Lecture

12 Hours

Seminars / Tutorials

4 Hours

Assessment

Assessment Type	Assessment Length/Details	Proportion
Semester Exam	1.5 Hours	100%

Learning outcomes

By the end of the module students should have an understanding of:

The expected utility hypothesis of choice under uncertainty;

Risk aversion and risk pooling;

Asymmetric information and the problems of adverse selection and moral hazard.

Aims

This module extends the microeconomic analysis of choice covered in EC30230 to consider choice under conditions of uncertainty. We then develop the closely related issue of asymmetric information and the related problems of market failure, adverse selection and moral hazard. Applications to the financial market are addressed in detail.

Reading Lists

Books
** Essential Reading
H Varian Intermediate Microeconomics
** Supplementary Text
W Nicholson Microeconomic Theory
M L Katz and H R Rosen Microeconomics
B C Eaton, D F Eaton and D W Allen Microeconomics 4th.

Notes

This module is at CQFW Level 6