Asymmetric information systematic analysis

We might assume before hand that the principal-agent problem deals with asymmetric information. This is just one of the cases where this kind of happening occurs.

Given the conditional probability distribution function, the amount of data that an individual is willing to give is proportional the information that [he thinks the person he is talking to already knows before hand]. The generic formula to modeled this kind of situation is given by a probability function.

As information is a good, we consider its demand and supply.

Unknown information

 

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