What are Spence's main contributions to economics?
Analyze the effects of fiscal policy
Criticize Keynesian economics
Analyze markets with asymmetric information
Promote classical liberalism
Answer
Asymmetric information arises when one party to a transaction has more or better information than the other. A seminal contribution of Nobel laureate Michael Spence is the analysis of markets characterized by information asymmetry, where he demonstrates how information asymmetry can affect market outcomes and efficiency.
Mastering Economics: The Michael Spence Quiz
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