When product or service quality cannot be well-specified ex-ante because of uncertainty and information asymmetry, consumer surplus (CS) is not well-defined or known ex-ante. Traditional measures of CS have implicitly assumed that the quality expected is the same as the quality that is paid for....

When product or service quality cannot be well-specified ex-ante because of uncertainty and information asymmetry, consumer surplus (CS) is not well-defined or known ex-ante. Traditional measures of CS have implicitly assumed that the quality expected is the same as the quality that is paid for....

This paper proposes a principal-agent model of moral hazard and adverse selection that introduces the notion of screening, which is distinct from sorting; and distinguishes between ability that is privately known by the agent versus general ability that is observable by the principal and market....

This paper proposes a principal-agent model of moral hazard and adverse selection that introduces the notion of screening, which is distinct from sorting; and distinguishes between ability that is privately known by the agent versus general ability that is observable by the principal and market....