Riordan and Sappington (JET, 1988) show that in an agency relationship in which the agent's type is correlated with a public ex post signal, the principal may attain first best (full surplus extraction and efficient output levels) if the agent is faced with a lottery such that each type is...

We consider a mechanism design setting in which agents can acquire costly information on their preferences as well as others'. The choice of the mechanism generates informational incentives as it affects what information is acquired before play begins. A mechanism is informationally simple if...

This textbook incorporates the author's previous book "The Economics of Uncertainty and Insurance" and extends it with the addition of several new chapters on risk sharing, asymmetric information, adverse selection, signaling and moral hazard. It provides a comprehensive introduction to the...