Question
Asymmetry in this variable leads to adverse selection in which one side participates in trades that benefit them at the expense of others. For 10 points each:
[10e] Name this variable that can be “complete” in game theory when the strategies of all competitors are common knowledge.
ANSWER: information [accept complete information; accept information asymmetry]
[10m] This economist explained market failures resulting from information asymmetry using a scenario about an honest car salesman being driven out of business because he doesn’t know whether a used car is a good “peach” or a bad “lemon” in a 1970 paper.
ANSWER: George Akerlof [or George Arthur Akerlof] (The paper is “The Market for Lemons.”)
[10h] Michael Spence shared the Nobel Prize in Economics with Akerlof for creating a model of this strategy exemplified by job-seeker’s education credentials.
ANSWER: signaling [accept job-market signaling model]
<GP, Social Science>
Summary
| 2024 ARCADIA at UC Berkeley | 2024-12-06 | Y | 2 | 20.00 | 50% | 100% | 50% |
| 2024 ARCADIA at Waterloo | 2024-11-09 | Y | 1 | 20.00 | 100% | 100% | 0% |
| 2024 ARCADIA at Illinois | 2024-11-09 | Y | 1 | 30.00 | 100% | 100% | 100% |
Data
| Waterloo Basic | Toronto A | 10 | 10 | 0 | 20 |