10 Questions
Which one of these best describes the concept of moral hazard?
The tendency of a person to engage in dishonest behavior when they are not being monitored
Which one of these is an example of how employers can respond to moral hazard?
Better monitoring
Which one of these best describes the concept of adverse selection?
A situation where a principal knows more about their situation than the agent
Which one of these best describes the concept of signaling?
An action taken by an informed party to reveal private information to an uninformed party
Which one of these best describes the concept of screening?
An action taken by an uninformed party to induce an informed party to reveal information
Which one of these best describes the concept of asymmetric information?
Where two parties have access to different information
Which one of these best describes the concept of satisficers?
Those who make decisions based on securing a satisfactory rather than optimal outcome
Which one of these best describes the concept of behavioral economics?
The study of how human beings make errors in decision-making and are influenced by framing and value of outcomes
Which one of these best describes the concept of principal in information and behavioral economics?
A person for whom another person, called the agent, is performing some act
Which one of these best describes the concept of agent in information and behavioral economics?
A person who is performing an act for another person, called the principal
Test your knowledge on information and behavioral economics principles such as principal-agent relationships and asymmetric information. Explore the concept of hidden actions and how it impacts principals' concerns.
Make Your Own Quizzes and Flashcards
Convert your notes into interactive study material.
Get started for free
