7. George Akerlof, Michael Spence, and Joseph Stiglitz were awarded the 2001 Nobel prize in economics for their research on (a) contracts with moral hazard (b) hyperbolic discounting and intertemporal preferences (c) incoherent probability judgments and Dutch books (d) markets with asymmetric information

7. George Akerlof, Michael Spence, and Joseph Stiglitz were awarded the 2001 Nobel prize in economics for their research on (a) contracts with moral hazard (b) hyperbolic discounting and intertemporal preferences (c) incoherent probability judgments and Dutch books (d) markets with asymmetric information

Principles of Economics, 7th Edition (MindTap Course List)

7th Edition

ISBN:9781285165875

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter27: The Basic Tools Of Finance

Section: Chapter Questions

Problem 5PA

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Similar questions

How can moral hazard lead to more costly insurance premiums than one was expected?
5. Explain how imperfect information problems such as adverse selection and moral hazard might affect the following markets or situations (also identify the problem whether adverse selection or moral hazard or both of them) a. Workers report medical history for health insurance. b. The market for used car. c. The market for automobile collision insurance
Someone indicated that employee’s absence from work despite meeting the eight hours per day requirement affect productivity and increase cost of business. If an employee makes up the hours by coming early and leaving late, how can you call it an example of moral hazard when the manager can easily correct this behavior? Please explain to the class.
1) A key difficulty facing insurance companies is that people know more about their health than do insurance companies, and that those people who are seriously ill are the most likely to want to obtain health insurance. What is this phenomenon called? A) moral hazard B) economic irrationality C) asymmetric information D) adverse selection 2) An insurance company is likely to attract customers like Clancy who want to purchase insurance because he knows better that the company that he is more likely to make a claim on a policy. What is the term used to describe the situation above? A) moral hazard B) adverse selection C) asymmetric information D) economic irrationality 3) The term that is used to refer to a situation in which one party to an economic transaction has less information than the other party is A) inefficient market hypothesis. B) moral hazard. C) information disparity. D) asymmetric information. 4) Which of the following parties is…