Applied economics, contrast explanation and asymmetric information

The purpose of this paper is to illustrate the workings of an explanatory method for applied economics. It is a method that is rarely explicitly examined or defended in the discipline, but which, I believe, has a lot of promise for the sorts of contexts that economists must address. My strategy is to show that, and how, the method in question effectively underpins at least one study already widely regarded as explanatorily successful. Copyright The Author 2008. Published by Oxford University Press on behalf of the Cambridge Political Economy Society. All rights reserved., Oxford University Press.