Class 17: Asymmetric information and incentives Asymmetric information; moral hazard and adverse selection in insurance markets and the workplace; principal-agent problems and incentives. Reading: Pindyck and Rubinfeld Ch 17. Podcast: Why Textbook Prices Keep Climbing, Planet Money. Exercises: KW - Ch 20 problems 12, 14. Discussion: Hal Varian, A Bangladesh Bank Relies on Peer Pressure for Collateral, NY Times Assignment: Assignment #7 due 18: Second midterm Class 19: Externalities Positive and negative externalities; remedies involving market incentives and property rights. Reading: KW - Ch 16. Exercises: KW Ch 16 - problems 2, 6, and 8. – Discussion: Guns and Bullets: Can We Tax Our Way to Safety? Taxrates.com Class 20: Externalities (cont); Tradable permits and economics of suburban sprawl Permit auctions to address pollution; the causes of suburban sprawl and appropriate remedies. Jan Brueckner, Sprawl: Diagnosis and Remedies” Reading: “Urban Gordon, Peter and Harry W. Richardson, it: The Costs and Benefits of “Prove Sprawl.” (1998): 23–25. The Brookings Review Discussion: Tradable permits exercise (posted) - prepare auction strategy before class. Class 21: Public goods and common resources Public goods and common resources; the problems they pose for market allocation and policy responses. Reading: KW Ch 17. Exercises: KW - Ch 17 problem 4. Discussion: Congestion in Singapore Assignment: Assignment #8 due 22: Real Estate Valuation Reading: Peter Linneman, Pro Forma Analysis.” “Property-Level John Herbohn and Steve Harrison, to Discounted Cash Flow “Introduction
Class 17: Asymmetric information and incentives Asymmetric information; moral hazard and adverse selection in insurance markets and the workplace; principal-agent problems and incentives. Reading: Pindyck and Rubinfeld Ch 17. Podcast: Why Textbook Prices Keep Climbing, Planet Money. Exercises: KW - Ch 20 problems 12, 14. Discussion: Hal Varian, A Bangladesh Bank Relies on Peer Pressure for Collateral, NY Times Assignment: Assignment #7 due 18: Second midterm Class 19: Externalities Positive and negative externalities; remedies involving market incentives and property rights. Reading: KW - Ch 16. Exercises: KW – Ch 16 - problems 2, 6, and 8. Discussion: Guns and Bullets: Can We Tax Our Way to Safety? Taxrates.com Class 20: Externalities (cont); Tradable permits and economics of suburban sprawl Permit auctions to address pollution; the causes of suburban sprawl and appropriate remedies. Reading: Jan Brueckner, “Urban Sprawl: Diagnosis and Remedies” Gordon, Peter and Harry W. Richardson, “Prove it: The Costs and Benefits of Sprawl.” The Brookings Review (1998): 23–25. Discussion: Tradable permits exercise (posted) - prepare auction strategy before class. Class 21: Public goods and common resources Public goods and common resources; the problems they pose for market allocation and policy responses. Reading: KW Ch 17. Exercises: KW - Ch 17 problem 4. Discussion: Congestion in Singapore Assignment: Assignment #8 due 22: Real Estate Valuation Reading: Peter Linneman, “Property-Level Pro Forma Analysis.” John Herbohn and Steve Harrison, “Introduction to Discounted Cash Flow
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