ECON498U

Prerequisites: 1 course with a minimum grade of C- from (ECON306, ECON326); and 1 course with a minimum grade of C- from (ECON230, BMGT230 , ECON321, STAT400). This course breaks down the role of informational asymmetries and uncertainty in economics into three parts. Decision theory is concerned with how economists model decision-making by a rational agent faced with uncertainty. The economics of uncertainty studies how several (often many) decision makers interact through markets and similar institutions in order to ameliorate risks. Finally, information economics deals with how markets behave when some actors are better informed than others and may have incentives to hide or transmit their information. Topics studies include the value of information, the purchase of warranties, agency problems in management, adverse selection and moral hazard in insurance, and signaling in education.