An Interview with Nobel Prize Winning Economist – Prof. Michael Spence

Guest article written for AllAboutAlpha.com – the official publication of the  Chartered Alternative Investment Analyst (CAIA) Association Originally posted at: http://allaboutalpha.com/blog/2012/06/24/michael-spence-nobel-laureate-on-information-and-momentum/   Analysis of any economic and financial system requires an understanding of two key factors; information and momentum. Understanding the information content of a system means having knowledge relating to the fundamental nature of what is being observed and its context.  What are you seeing? why does it behave as it does? what influences its…

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The Moral Hazard of Asymmetric Information

Regardless of whether one agrees with the rationale behind Wikileaks‘ release of thousands of diplomatic cables, one certainty is that their appearance has opened a necessary debate on moral hazard’s in our own democracy. Manifesting Moral Hazard Information Asymmetry is an important concept, usually noted in transactional situations, where one party has more (or better) information than another- creating an imbalance of power (or influence) in a transaction- affecting the outcome.  “Moral Hazard” is a…

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