Man Ec: #14 Flashcards
1
Q
What are incomplete contracts and how do they relate to bounded rationality?
A
an agreements that fails to take in every possible contingency that could take place, because of bounded rationality which is the high costs of learning all information needed
2
Q
What are ex ante and ex post time periods of a contract?
A
Ex ante is before the contract and ex post is after the contract is signed.
3
Q
what is the reservation price?
A
the amount that a buyer would pay for a good
4
Q
strategic misrepresentation is ex ante opportunistic behavior that involves…
A
being less than truthful about ones assessment of an exchange position to try and gain the upper hand
