1.What is an agent?
2. What is a principal?
3. What is moral hazard?
4. What is asymmetric information?
5. What is adverse selection?
6. What are three mistakes that people make that suggest they are not always rational.
7. Are people willing to economically suffer in order to impose fairness on others?
1.What is an agent?
ReplyDeleteAn agent is a person who is performing an act for another person, called the principal.
2. What is a principal?
The principal is a person for whom another person, called the agent, is performing some act.
3. What is moral hazard?
Changing after the transaction to make other party worse off.
4. What is asymmetric information?
A difference in access to relevant knowledge
5. What is adverse selection?
Taking advantage of someone's lack of knowledge.
6. What are three mistakes that people make that suggest they are not always rational.
-People are overconfident
-People give too much weight to a small number of vivid observations
-People are reluctant to change their minds.
7. Are people willing to economically suffer in order to impose fairness on others?
Yes.
Abeer AlHarbi
151409