Information Economics

How does information affect economic relations? What of the strategic issues surrounding the use of information: the make-buy-or-copy decision; the working and failure of markets; and the important role of outguessing each other in a macroeconomic context? Now, to help advanced students and researchers make sense of these and other dizzying questions, Routledge announces a new title in its acclaimed Critical Concepts in Economics series. Edited by David E. M. Sappington, a leading scholar in the field, Information Economics is a ‘mini library’ that brings together in four volumes the foundational and the very best cutting-edge research. With a comprehensive introduction, newly written by the editor, which places the collected material in its historical and intellectual context, Information Economics is an essential collection and is destined to be valued as a vital one-stop resource.

Volume I: Foundations of Information Economics Part 1: Modelling Risk, Uncertainty, and Beliefs 1. Milton Friedman and L. J. Savage, ‘The Expected-Utility Hypothesis and the Measurability of Utility’, Journal of Political Economy, 1952, 60, 6, 463–74. 2. John W. Pratt, ‘Risk Aversion in the Small and in the Large’, Econometrica, 1964, 32, 1/2, 122–36. 3. John W. Pratt, ‘Erratum: Risk Aversion in the Small and in the Large’, Econometrica, 1976, 44, 2, 420. 4. Josef Hadar and William R. Russell, ‘Rules for Ordering Uncertain Prospects’, American Economic Review, 1969, 59, 1, 25–34. 5. Michael Rothschild and Joseph E. Stiglitz, ‘Increasing Risk: 1. A Definition’, Journal of Economic Theory, 1970, 2, 3, 225–43. 6. Martin L. Weitzman, ‘Prices vs. Quantities’, Review of Economic Studies, 1974, 41, 4, 477–91. 7. Paul R. Milgrom, ‘Good News and Bad News: Representation Theorems and Applications’, Bell Journal of Economics, 1981, 12, 2, 380–91. 8. David M. Kreps and Robert Wilson, ‘Sequential Equilibria’, Econometrica, 1982, 50, 4, 863–94. 9. In-Koo Cho and David M. Kreps, ‘Signaling Games and Stable Equilibria’, Quarterly Journal of Economics, 1987, 102, 2, 179–222. Part 2: Information and the Functioning of Markets 10. William Vickrey, ‘Counterspeculation, Auctions, and Competitive Sealed Tenders’, Journal of Finance, 1961, 16, 1, 8–37. 11. George J. Stigler, ‘The Economics of Information’, Journal of Political Economy, 1961, 69, 3, 213–25. 12. George A. Akerlof, ‘The Market for "Lemons": Quality Uncertainty and the Market Mechanism’, Quarterly Journal of Economics, 1970, 84, 3, 488–500. 13. Oliver E. Williamson, ‘The Vertical Integration of Production: Market Failure Considerations’, American Economic Review, 1971, 61, 2, 112–23. 14. Michael Spence, ‘Job Market Signaling’, Quarterly Journal of Economics, 1973, 87, 3, 355–74. 15. Michael Rothschild and Joseph E. Stiglitz, ‘Equilibrium in Competitive Insurance Markets: An Essay on the Economics of Imperfect Information’, Quarterly Journal of Economics, 1976, 90, 4, 629–49. 16. Michael Mussa and Sherwin Rosen, ‘Monopoly and Product Quality’, Journal of Economic Theory, 1978, 18, 2, 301–17. 17. Sanford J. Grossman and Joseph E. Stiglitz, ‘On the Impossibility of Informationally Efficient Markets’, American Economic Review, 1980, 70, 3, 393–408. 18. Benjamin Klein and Keith B. Leffler, ‘The Role of Market Forces in Assuring Contractual Performance’, Journal of Political Economy, 1981, 89, 4, 615–41. 19. Joseph E. Stiglitz and Andrew Weiss, ‘Credit Rationing in Markets with Imperfect Information’, American Economic Review, 1981, 71, 3, 393–410. Volume ii: Information, Contracting, and Organization Part 3: Contracting with Moral Hazard 20. Bengt Holmstrom, ‘Moral Hazard and Observability’, Bell Journal of Economics, 1979, 10, 1, 74–91. 21. Bengt Holmstrom, ‘Moral Hazard in Teams’, Bell Journal of Economics, 1982, 13, 2, 324–40. 22. William P. Rogerson, ‘The First-Order Approach to Principal-Agent Problems’, Econometrica, 1985, 53, 6, 1357–67. 23. Robert D. Innes, ‘Limited Liability and Incentive Contracting with Ex-ante Action Choices’, Journal of Economic Theory, 1990, 52, 1, 45–67. 24. Bengt Holmstrom and Paul R. Milgrom, ‘Multitask Principal-Agent Analyses: Incentive Contracts, Asset Ownership, and Job Design’, Journal of Law, Economics, and Organization, 1991, 7, 1, 24–52. Part 4: Tournaments 25. Edward P. Lazear and Sherwin Rosen, ‘Rank-Order Tournaments as Optimum Labor Contracts’, Journal of Political Economy, 1981, 89, 5, 841–64. 26. Barry J. Nalebuff and Joseph E. Stiglitz, ‘Prizes and Incentives: Towards a General Theory of Compensation and Competition’, Bell Journal of Economics, 1983, 14, 1, 21–43. Part 5: Contracting with Adverse Selection 27. J. A. Mirrlees, ‘An Exploration in the Theory of Optimum Income Taxation’, Review of Economic Studies, 1971, 38, 2, 175–208. 28. Jean-Jacques Laffont and Jean Tirole, ‘Using Cost Observation to Regulate Firms’, Journal of Political Economy, 1986, 94, 3, 614–41. 29. Tracy R. Lewis and David E. M. Sappington, ‘Countervailing Incentives in Agency Problems’, Journal of Economic Theory, 1989, 49, 2, 294–313. Part 6: Contractual Incompleteness 30. Sanford J. Grossman and Oliver D. Hart, ‘The Costs and Benefits of Ownership: A Theory of Vertical and Lateral Integration’, Journal of Political Economy, 1986, 94, 4, 691–719. 31. B. Douglas Bernheim and Michael D. Whinston, ‘Incomplete Contracts and Strategic Ambiguity’, American Economic Review, 1998, 88, 4, 902–32. Part 7: Authority and Collusion in Organizations 32. Jean Tirole, ‘Hierarchies and Bureaucracies: On the Role of Collusion in Organizations’, Journal of Law, Economics, and Organization, 1986, 2, 2, 181–214. 33. Philippe Aghion and Jean Tirole, ‘Formal and Real Authority in Organizations’, Journal of Political Economy, 1997, 105, 1, 1–29. Part 8: Contract Renegotiation 34. Oliver Hart and John Moore, ‘Incomplete Contracts and Renegotiation’, Econometrica, 1988, 56, 4, 755–85. Volume III: Information, Communication, and Prices Part 9: Auctions 35. Roger B. Myerson, ‘Optimal Auction Design’, Mathematics of Operations Research, 1981, 6, 1, 58–73. 36. John G. Riley and William F. Samuelson, ‘Optimal Auctions’, American Economic Review, 1981, 71, 3, 381–92. 37. Paul R. Milgrom and Robert J. Weber, ‘A Theory of Auctions and Competitive Bidding’, Econometrica, 1982, 50, 5, 1089–122. 38. Jeremy Bulow and Paul Klemperer, ‘Auctions Versus Negotiations’, American Economic Review, 1996, 86, 1, 180–94. 39. Benjamin Edelman, Michael Ostrovsky and Michael Schwarz, ‘Internet Advertising and the Generalized Second-Price Auction: Selling Billions of Dollars Worth of Keywords’, American Economic Review, 2007, 97, 1, 242–59. Part 10: Bargaining 40. Roger B. Myerson, ‘Incentive Compatibility and the Bargaining Problem’, Econometrica, 1979, 47, 1, 61–73. 41. Roger B Myerson and Mark A Satterthwaite, ‘Efficient Mechanisms for Bilateral Trading’, Journal of Economic Theory, 1983, 29, 2, 265–81. Part 11: Search 42. J. J. McCall, ‘Economics of Information and Job Search’, Quarterly Journal of Economics, 1970, 84, 1, 113–26. 43. Peter A. Diamond, ‘A Model of Price Adjustment’, Journal of Economic Theory, 1971, 3, 2, 156–68. 44. Michael Rothschild, ‘Searching for the Lowest Price When the Distribution of Prices is Unknown’, Journal of Political Economy, 1974, 82, 4, 689–711. 45. Jennifer F. Reinganum, ‘A Simple Model of Equilibrium Price Dispersion’, Journal of Political Economy, 1979, 87, 4, 851–8. 46. Peter Morgan and Richard Manning, ‘Optimal Search’, Econometrica, 1985, 53, 4, 923–44. Part 12: The Pricing of Information 47. Michael R. Baye and John Morgan, ‘Information Gatekeepers on the Internet and the Competitiveness of Homogeneous Product Markets’, American Economic Review, 2001, 91, 3, 454–74. Part 13: Advertising and Price Signalling 48. Phillip Nelson, ‘Advertising as Information’, Journal of Political Economy, 1974, 82, 4, 729–54. 49. Paul R. Milgrom and John Roberts, ‘Price and Advertising Signals of Product Quality’, Journal of Political Economy, 1986, 94, 4, 796–821. Part 14: Communication 50. Vincent P. Crawford and Joel Sobel, ‘Strategic Information Transmission’, Econometrica, 1982, 50, 6, 1431–51. 51. Marco Battaglini, ‘Multiple Referrals and Multidimensional Cheap Talk’, Econometrica, 2002, 70, 4, 1379–401. 52. Mathias Dewatripont and Jean Tirole, ‘Modes of Communication’, Journal of Political Economy, 2005, 113, 6, 1217–38. Volume iv: Information and Industry Organization Part 15: Modelling Industry Outcomes 53. Paul D. Klemperer and Margaret A. Meyer, ‘Supply Function Equilibria in Oligopoly under Uncertainty’, Econometrica, 1989, 57, 6, 1243–77. 54. Daniel F. Spulber, ‘Bertrand Competition when Rivals’ Costs are Unknown’, Journal of Industrial Economics, 1995, 43, 1, 1–11. Part 16: Collusion 55. George J. Stigler, ‘A Theory of Oligopoly’, Journal of Political Economy, 1964, 72, 1, 44–61. 56. David M. Kreps, Paul

Edited and with a new introduction by Michael R. Baye, Indiana University, USA andDavid E. M. Sappington, University of Florida, USA