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Microeconomic Theory - Brousseau

Microeconomic Theory AndreuMas-Colell MichaelD. Whinston and Jeny R. Green N e wY o rk Oxfor d OXFORD UNIVERSITY PRESS r995. C H A P T E R. AdverseSelection, Signaling, T3. and Screening Introduction One of the impiicit assumptionsol the fundamentaiwelfaretheoremsis that the characteristics of all commodities areobservable to all marketparticipants. Without thiscondition,distinctmarketscannotexist for goodshavingdiffering characteristics, and so the completemarketsassumption reality,however,this kind of informationis often asymmetricallyheld by market foliowingthreeexamples: (i) When a firm hiresa worker,the firm may know lessthan the worker does about the worker'sinnateabilitv.

Microeconomic Theory Andreu Mas-Colell Michael D. Whinston and Jeny R. Green New York Oxford OXFORD UNIVERSITY PRESS r995

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