This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: How does asymmetric information affect a contract?[br][br][b][color=#7BCCB5]Question ... (Read 61 times)

debasdf

  • Hero Member
  • *****
  • Posts: 570
on: Jun 30, 2018
How does asymmetric information affect a contract?

Question 2

Without contracts, what type of transactions would occur?
 A) forward purchases.
  B) lateral purchases.
  C) spot transactions.
  D) side bars.


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

mammy1697

  • Sr. Member
  • ****
  • Posts: 341
Reply #1 on: Jun 30, 2018
Answer to Question 1

If one party to an agreement holds information that the other does not, the difference can affect both of their incentives and behaviors. Due to the problem of asymmetric information the economic value a contract could potentially create may be diminished if the uninformed party cannot easily learn or verify important information, or if the informed party cannot credibly convey it.

Answer to Question 2

C


debasdf

  • Member
  • Posts: 570
Reply 2 on: Jun 30, 2018
Gracias!

komodo7

  • Member
  • Posts: 322
Reply 3 on: Yesterday
YES! Correct, THANKS for helping me on my review

« previous next »
 

Did you know?

ACTH levels are normally highest in the early morning (between 6 and 8 A.M.) and lowest in the evening (between 6 and 11 P.M.). Therefore, a doctor who suspects abnormal levels looks for low ACTH in the morning and high ACTH in the evening.

Did you know?

By definition, when a medication is administered intravenously, its bioavailability is 100%.

Did you know?

Women are 50% to 75% more likely than men to experience an adverse drug reaction.

Did you know?

Fewer than 10% of babies are born on their exact due dates, 50% are born within 1 week of the due date, and 90% are born within 2 weeks of the date.

Did you know?

Chronic necrotizing aspergillosis has a slowly progressive process that, unlike invasive aspergillosis, does not spread to other organ systems or the blood vessels. It most often affects middle-aged and elderly individuals, spreading to surrounding tissue in the lungs. The disease often does not respond to conventionally successful treatments, and requires individualized therapies in order to keep it from becoming life-threatening.

English and Dani basic color terms. English and Dani basic color terms.
Color Minerals Color Minerals
My question is relating to impulse problems. My question is relating to impulse problems.
The phenotypic distribution in a cross with two traits: seed color and seed shape. Plants in the F2 The phenotypic distribution in a cross with two traits: seed color and seed shape. Plants in the F2
Dark Blue Eye Color Dark Blue Eye Color
Morgan’s analysis of genetic linkage of X-linked genes for eye color Morgan’s analysis of genetic linkage of X-linked genes for eye color
Video: Mendel's Principles of Dominance, Segregation and Independent Assortment

For a complete list of videos, visit our video library