Perfect markets achieve efficiency: maximizing total surplus generated. But real markets are imperfect. In this course we will explore a set of market imperfections to understand why they fail and to explore possible remedies including as antitrust policy, regulation, government intervention. Examples are taken from everyday life, from goods and services that we all purchase and use. We will apply the theory to current events and policy debates through weekly exercises. These will empower you to be an educated, critical thinker who can understand, analyze and evaluate market outcomes.
5.1.1 Adverse Selection
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Skills You'll Learn
Externality, Economics, Microeconomics, Market (Economics)
Reviews
Oct 23, 2018
Love how the videos were brief, but informative. Very helpful class and exams weren't overly complicated. In the end, I felt as though I retained much of the knowledge.
Apr 4, 2020
In the beginning, it started to clear out my basics. As we got closer to the end of the course, it related the theoretical knowledge gained to the practical scenario.
From the lesson
Asymetric Information and Inequlity
Up to this point we assumed that there is full information in the market. We are now ready to relax this assumption as we introduce the concepts of moral hazard and adverse selection. We learn that asymmetric information may lead to market failure and we discuss some remedies. The last segment in the course is a reminder that besides efficiency, equity is also a criteria we all care about. A short introduction will explore how economist measure poverty and inequality.
Taught By
Rebecca Stein
Senior Lecturer
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