The document provides information about an upcoming exam, including the date, time, location, and topics to be covered. Exam 7 will take place on Saturday, January 4th from 9:00 to 11:30 AM in rooms Men BG 088 and Women B3 059. The exam will cover material from lectures 22 on asymmetric information and behavioral economics, as well as previous exams and key terms related to agency theory, information asymmetry, moral hazard, adverse selection, and behavioral economics concepts.

1. Next Exam
!
Exam 7
Saturday January 4th
9:00 to 11:30
Men BG 088
Women B3 059
!
All Lectures and Chapters

2. Microeconomics
Lecture 22
!
Asymmetric Information
Behavioral Economics

3. Key Terms
!
asymmetric information
moral hazard
agent
principal
adverse selection
behavioral economics

4. agent
a person acting for
another person

5. principal
a person for whom
another person is
acting for

6. moral hazard
to act differently
because someone
else will pay the
costs

7. asymmetric
information
unequal information

8. Who knows more about the car?

9. Asymmetric Information
Not Equal
Symmetric
Buyer
Asymmetric
Seller

10. adverse selection
taking advantage of
someone’s lack of
knowledge

11. adverse selection
making a bad choice
due to lack of
information

12. moral hazard
changing behavior
after the transaction
to make the other
party worse off

13. moral hazard
temptation to act
immorally

14. behavioral economics
the psychology of
economic behavior

15. Are people always
rational?
Maybe not

16. Are people always
rational?
overconfidence
too quick to conclude
don’t easily change

17. Is fairness in more
important than money?
It can be
!

18. Ultimatum Game

19. Exam 7
25 questions
review six previous
exams
150 questions