Article ID Journal Published Year Pages File Type
357564 International Review of Economics Education 2013 8 Pages PDF
Abstract

The paper proposes a framework for teaching adverse selection based on simple graphical and numerical arguments. This framework goes beyond the typical case of discrete quality levels currently found in intermediate microeconomics books and allows for a (more realistic) continuum of quality levels without the resort to integral calculus. This proposed approach is useful for putting the emphasis on the beliefs of individuals about the behaviour of others and for considering thin markets and market vanishing as outcomes of dynamic processes.

Related Topics
Social Sciences and Humanities Economics, Econometrics and Finance Economics and Econometrics
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