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Handbook of the Economics of Risk and Uncertainty
book

Handbook of the Economics of Risk and Uncertainty

by Mark Machina, W. Kip Viscusi
November 2013
Beginner content levelBeginner
896 pages
35h 10m
English
North Holland
Content preview from Handbook of the Economics of Risk and Uncertainty
Benjamin E. Hermalin
340
6.5 ENDOGENOUS ASYMMETRIES OF INFORMATION AT TIME OF
CONTRACTING
To this point, the parties have been endowed with private information. In many situa-
tions, their private information arises because of actions they take; that is, it is endogenous.
For instance, a seller’s decisions about materials, production methods, and the like could
determine the quality of her product. As a second example, a buyer could make invest-
ments in complementary assets that affect his utility from purchasing the seller’s product
(e.g., a buyer’s utility from buying a new dvd player could depend on the number of
dvds previously acquired). ...
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Publisher Resources

ISBN: 9780444536853