An Introduction to the Economics of Information: Incentives and Contracts [Paperback]

Inďż1/2s Macho-Stadler (Author), J. David Pďż1/2rez-Castrillo (Author), Richard Watt (Translator)

Book Description

Publication Date: May 17, 2001 | ISBN-10: 0199243255 | ISBN-13: 978-0199243259 | Edition: 2

This is a graduate textbook on the theory of contracting under asymmetric information, a key part of modern microeconomic theory. It examines the characteristics of optimal contracts when one party has certain relevant knowledge that the other party does not. The various problems are presented in the same framework to allow easy comparison of the different results. This updated second edition substantially extends the exercises that test students' understanding of the material covered in each section.

Editorial Reviews

Review

On the previous edition:"It is a timely contribution to the discipline of Economics as a whole and in particular to Information Economics."--Ian Jackson, Staffordshire University

Language Notes

Text: Spanish (translation)
Original Language: English --This text refers to an out of print or unavailable edition of this title.

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Product Details

• Paperback: 304 pages
• Publisher: Oxford University Press, USA; 2 edition (May 17, 2001)
• Language: English
• ISBN-10: 0199243255
• ISBN-13: 978-0199243259
• Product Dimensions: 9.1 x 6.1 x 0.9 inches
• Shipping Weight: 1.1 pounds (View shipping rates and policies)
• Average Customer Review: 4.7 out of 5 stars  See all reviews (3 customer reviews)
• Amazon Best Sellers Rank: #873,931 in Books (See Top 100 in Books)

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Customer Reviews

Most Helpful Customer Reviews

22 of 22 people found the following review helpful:

5.0 out of 5 stars Information to the reader: this book is good, April 10, 2000

By 

Rodrigo D. S. Bueno (Sao Paulo - Brazil) - See all my reviews
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This review is from: An Introduction to the Economics of Information: Incentives and Contracts (Paperback)

In less than three hundred pages, the authors are able to introduce Moral Hazard, Adverse Selection and Signalling in an outstanding accessible way. Given the importance of contract theory in modern Economics, undoubtedely this is the first book to be read.

Each chapter is full of examples and graphs that help to understand the mathematics underneath.

The reader is supposed to know Kuhn-Tucker theorem, so any advanced undergraduate student in economics should be able to read it.

The base model, presented in chapter 2, is used as a benchmark to compare wirh the results obtained from the Moral Hazard model (brilliantly presented in chapter 3), Adverse Selection (chapter 4) and Signalling (chapter 5).

Each chapter has very well posed exercises, whose answers are in the end of the book. Furthermore, advanced themes are also discussed in the end of each chapter, giving to the reader a complete overview about theory of information.

So, since this theme has been increasingly important in modern economics, and given that this book is very easily readable, I strongly recommend it to any person who wishes to understand theory of contracts and incetives.

3 of 3 people found the following review helpful:

4.0 out of 5 stars good book that suffers in translation, February 22, 2009

By 

James Cunningham (Greensboro, NC USA) - See all my reviews
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This review is from: An Introduction to the Economics of Information: Incentives and Contracts (Paperback)

I've been assigned this book (as well as Bolton and Dewatripont's Contract Theory text) for a grad-level information class. In a way I'm of two minds -- this book is for the most part a clear, well-motivated introduction to the subject, a useful accompaniment to B&P's rather dryer book. On the other hand it's an obvious translation, full of typographical errors and amusing Spanglish. I don't know, for instance, what the monotonous likelihood quotient property is, but it certainly sounds bad.

All chapter exercises have answers in the back and there are just enough of them. For autodidacts (in whose company I count myself) this is immeasurably useful, an example I wish more textbooks would follow. Without the guidance of a teacher it's *hard* to pick your way through end-of-chapter problems in most books, when there are usually far too many of them and there's no way to get help when you're stuck.

0 of 1 people found the following review helpful:

5.0 out of 5 stars Economics of Information, February 17, 2008

By 

Grisel Ayllon Aragon "GAA" (Barcelona) - See all my reviews
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This review is from: An Introduction to the Economics of Information: Incentives and Contracts (Paperback)

Few books are concerned with this subject. Inés Macho-Stadler and David Pérez-Castrillo were able to explain in a intuitive and structural way the problems derived from asymmetric information. This book guides you along the way to understand clearly the features of this themes.