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Incomplete information ultimatum games: Some authors have studied variants of the ultimatum game in which either the proposer or the responder has private information about the size of the pie to be divided. [55] [56] These experiments connect the ultimatum game to principal-agent problems studied in contract theory.
In economics and game theory, complete information is an economic situation or game in which knowledge about other market participants or players is available to all participants. The utility functions (including risk aversion), payoffs, strategies and "types" of players are thus common knowledge .
Information economics or the economics of information is the branch of microeconomics that studies how information and information systems affect an economy and economic decisions. [ 1 ] One application considers information embodied in certain types of commodities that are "expensive to produce but cheap to reproduce."
In game theory, a Bayesian game is a strategic decision-making model which assumes players have incomplete information. Players may hold private information relevant to the game, meaning that the payoffs are not common knowledge. [1] Bayesian games model the outcome of player interactions using aspects of Bayesian probability.
Incomplete information Intuitive criterion and Divine equilibrium – refinements of PBE in signaling games. Screening game – a related kind of game where the uninformed player, the receiver, rather than choosing an action based on a signal, moves first and gives the informed player, the sender, proposals based on the type of the sender.
Information asymmetry is in contrast to perfect information, which is a key assumption in neo-classical economics. [11] In 1996, a Nobel Memorial Prize in Economics was awarded to James A. Mirrlees and William Vickrey for their "fundamental contributions to the economic theory of incentives under asymmetric information". [12]
In economics, incomplete markets are markets in which there does not exist an Arrow–Debreu security for every possible state of nature. [1] In contrast with complete markets , this shortage of securities will likely restrict individuals from transferring the desired level of wealth among states.
Standard economic theory suggests that in relatively open international financial markets, the savings of any country would flow to countries with the most productive investment opportunities; hence, saving rates and domestic investment rates would be uncorrelated, contrary to the empirical evidence suggested by Martin Feldstein and Charles ...