Asymmetric Information between Employers

Asymmetric Information

Asymmetric information, as the adjective indicates, refers to situations, in which some agent in a trade possesses information while other agents involved in the same trade do not. This rather self-evident premise has nevertheless revolutionized modern economic thought since the 1970s. Take, for example, two major results in the economics and finance literature, the first fundamental theorem of...

Asymmetric Information and the Link Between Leverage and Mortgage Default

Borrowers with large mortgages relative to their home values are more likely to default. This paper asks whether this correlation is due to moral hazard—larger balances causing borrowers to default— or adverse selection—ex-ante risky borrowers choosing larger loans. To separate these information asymmetries, I exploit a natural experiment resulting from (i) the unique contract structure of Opti...

DeVIL - Determining the value of information literacy for employers

1.1 This paper 1 reports on a project, DeVIL (Determining the Value of Information Literacy) that has aimed to identify quantitative and qualitative data which demonstrate the benefits of developing information literacy (IL) in workplace settings; and to assess the return on investment (ROI) of such initiatives. What value is added by employing and training individuals that have appropriate and...

Asymmetric Information and Rationalizability

We study how asymmetric information affects the set of rationalizable solutions in a linear setup where the outcome is determined by forecasts about this same outcome. The unique rational expectations equilibrium is also the unique rationalizable solution when the sensitivity of the outcome to agents’ forecasts is less than one, provided that this sensitivity is common knowledge. Relaxing this ...

Can employers put genetic information to good use?