ECON 1000 Chapter Notes - Chapter 22: Borda Count, Social Choice Theory, Behavioral Economics
29 Jul 2015
School
Department
Course
Professor
Document Summary
Moral hazard- the tendency of a person who is imperfectly monitored to engage in dishonest or otherwise undesirable behavior. Agent- a person who is performing an act for another person, called the principal. Principal- a person for whom another person, called the agent, is performing some act. Adverse selection- the tendency for the mix of unobserved attributes to become undesirable from the standpoint of an uninformed party. Signalling- an action taken by an informed party to reveal private information to an uninformed party. Screening- an action taken by an uninformed party to induce an informed party to reveal information. Condorcet paradox- the failure of majority rule to produce transitive preferences for society. Arrow"s impossibility theorem- a mathematical result showing that, under certain assumed conditions, there is no scheme for aggregating individual preferences into a valid set of social preferences. One person who knows more about what is going on than another.
