კონფერენცია

∘ Merab Julakidze ∘
THE ECONOMICS OF INFORMATION

Summary

The article discusses the main topics concerning the information asymmetry in contact with economics. Information asymmetry deals with the study of decision in transactions where one party has more or better information than the other. This asymmetry creates an imbalance of power in transactions, which can sometimes cause the transactions to go away, a kind of market failure in the worst case. Examples of this problem are adverse selection, moral hazard, monopolies of knowledge, and finally, these can lead inefficiencies. Carefully designed contracts may reduce such problems by providing incentives to reveal one’s information and take appropriate actions.

Ivane Javakhishvili Tbilisi State University Paata Gugushvili Institute of Economics International Scientific C O N F E R E N C E S "ECONOMY – XXI CENTURY"

E ISSN 2587 - 4691	∘ Merab Julakidze ∘ THE ECONOMICS OF INFORMATION Summary The article discusses the main topics concerning the information asymmetry in contact with economics. Information asymmetry deals with the study of decision in transactions where one party has more or better information than the other. This asymmetry creates an imbalance of power in transactions, which can sometimes cause the transactions to go away, a kind of market failure in the worst case. Examples of this problem are adverse selection, moral hazard, monopolies of knowledge, and finally, these can lead inefficiencies. Carefully designed contracts may reduce such problems by providing incentives to reveal one’s information and take appropriate actions.