Term Paper-Asymmetric information
- Select a financial institution or market and discuss the causes of asymmetric information.
- Describe real-world examples of adverse selection and moral hazard problems for your institution/intermediary or market.
- Evaluate the impacts of adverse selection and moral hazard problems on your financial institution/intermediary or market.
- Discuss a principal-agent problem in your financial institution/intermediary or market. A principal-agent problem is a moral hazard problem between managers and shareholders.
- Analyze whether your financial institution/intermediary or market can reduce the adverse selection and/or moral hazard problems.