Answer to Question #77617 in Microeconomics for SHUBHAM SINGH

Question #77617
(a) Differentiate between hidden information and hidden action. Suggest measures for
minimizing the consequences of such problems.
1
Expert's answer
2018-05-28T13:41:08-0400
(a) Hidden action and hidden information: After the contract is made, one of the actors' actions cannot be observed (hidden action); if it can be observed, its qualities cannot be determined (hidden information).

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