Tim Harford, author of The
Logic of Life and
The
Undercover Economist,
explains asymmetric information in this short
clip.
Why is this a problem not just for the buyer but also for
the seller? How can you show you are a peach if you really
are?
What the video below, used on the website aguanomics.com, calls an "all-pay auction," the text calls the entrapment game. Why do people pay more than a dollar to win a dollar? What is the best strategy in this game? Why does this auction have relevance to political lobbying?