Economics of Information

3 Credits · Level: Graduate, Undergraduate

In this course we will inspect a piece of the puzzle that has been mostly left out of the core courses in economics: Information. Prices depend on individual preferences that are private information --- how does it come to pass that the competitive equilibrium price reflects this information? In the stock market, individuals' decisions to buy or sell convey information about their estimate of a stock's value --- can such signaling account for stock market bubbles and crashes? Slot machines have different payouts, but casino owners do not tell their customers what the payout is --- how should one optimally gamble when confronted with several different slot machines?