tailieunhanh - Lecture Principles of microeconomics - Chapter 12: The economics of information

This chapter introduces you to the economics of information and the role of asymmetric information in completing transactions. You will learn that the prices of products in the marketplace are often affected because buyers and sellers do not share the same information. | The Economics of Information Slide 12 - What is Chapter 12 about? Slide 12 - I. The Importance of Information Slide 12 - Perfect Information The invisible hand theory assumes perfect information What goods and services are available What prices they sell for The quality of the goods and services But information can be costly or impossible to obtain Slide 12 - Gathering Information Two Key cases: Information that is costly to acquire Issue then is what strategies to use to gather information & when do we have enough Read Consumer Reports, Talk to family and friends, Internet, Direct contacts Information that is inherently asymmetric Seller may have opportunity & motive not to disclose information (. used car) When information is being purchased, seller inevitably knows more (. MD, lawyer) Slide 12 - Middleman can add Value by certifying quality Consumers must rely on information from others Sales agents or “middlemen” Provide the service of gathering . | The Economics of Information Slide 12 - What is Chapter 12 about? Slide 12 - I. The Importance of Information Slide 12 - Perfect Information The invisible hand theory assumes perfect information What goods and services are available What prices they sell for The quality of the goods and services But information can be costly or impossible to obtain Slide 12 - Gathering Information Two Key cases: Information that is costly to acquire Issue then is what strategies to use to gather information & when do we have enough Read Consumer Reports, Talk to family and friends, Internet, Direct contacts Information that is inherently asymmetric Seller may have opportunity & motive not to disclose information (. used car) When information is being purchased, seller inevitably knows more (. MD, lawyer) Slide 12 - Middleman can add Value by certifying quality Consumers must rely on information from others Sales agents or “middlemen” Provide the service of gathering information Make it available to people who can use it Consumers’ trade off: benefits from search - lower price? costs (time & $) of search Specialists enable more total economic surplus as goods go from lower-valued uses to higher- valued uses Slide 12 - II. The Optimal Amount of Information Slide 12 - When do I have “enough” information to decide ? Benefits - having more information is better than having less BUT The value of additional information tends to decline beyond some point Costs - Information is often costly to acquire Time cost = opportunity cost of time The marginal cost of gathering additional information increases, if people gather from the cheapest sources first Slide 12 - Fig. The Optimal Amount of Information Slide 12 - Optimal Amount of Information AKA the optimal amount of ignorance Search can be seen as an investment activity – investing in information Rule: stop collecting information when the marginal expected benefit equals the marginal expected .

• Kinh tế học
• Principles of microeconomics
• Lecture Principles of microeconomics
• Market imperfections
• Labour markets
• Marginal benefit of information
• Marginal cost of information
• Ten principles of economics
• Scarce resources
• Scarcity implies choice
• Choice implies cost
• Thinking like an economist
• Economic models
• Circular flow diagram
• Production possibilities frontier
• The gains from trade
• Production possibilities
• Comparative advantage
• Absolute advantage
• Market forces
• Supply and demand
• Market economies
• Competitive markets
• Price elasticity of demand
• Price elasticity
• Midpoint method
• Demand curves
• Controls on prices
• Price ceiling
• Price floor
• Market outcomes
• Market failures
• Negative externalities
• Positive externalities
• Market inefficiency
• Public goods
• Common resources
• Types of goods
• Cost benefit analysis
• Tax system
• Federal government
• Marginal tax rate
• Budget surplus
• Costs of production
• Total revenue
• Total cost
• Opportunity costs
• Firms in competitive markets
• Average revenue
• Marginal revenue
• Sunk costs
• Monopoly resources
• Government created monopolies
• Natural monopolies
• Monopoly’s revenue
• Monopolistic competition
• Nash equilibrium
• Equilibrium for oligopoly
• Game theory
• Long run equilibrium
• Perfect competition
• Production possibility frontier
• Opportunity cost
• Rational people
• Indirect effects
• Law of demand
• Factors change demand
• Law of supply
• Market demand
• Demand intersect
• Demand determine prices
• Change in demand
• Change in supply
• Elastic demand curve
• Policy analysis with supply
• Policy analysis with demand
• Wealth creation
• Production cost
• Total surplus
• International trade
• Additional benefits of trade
• Average costs
• Break even price
• Increasing marginal costs
• Long run analysis
• Firms profit graphically
• Accounting profit
• Market effectiveness
• Monopolist pricing
• Price discrimination
• Antitrust laws
• Disruptive innovation in oligopolies
• Predatory pricing