This course introduces the economic theory of uncertainty and asymmetric information. It discusses how incentives and optimal choices are affected by uncertainty, and the implications for the design of contracts. The focus is on various types of informational asymmetries and measures that can be undertaken to deal with these. Topics covered are the principal agent theory, moral hazard, adverse selection, signaling, screening and strategic interaction under uncertainty. Some of the practical applications examined are the analysis of measures to reduce exposure to risk, the supply and demand for insurance, the optimal risk distribution, market equilibrium under uncertainty and contract design.


Mathias Herzing. Office hours are to be announced


Tanja Appelberg
Office hours: Mon-Thu, 12.30-13.30, room A497.

Phone 16 30 38, e-mail:

  • Course syllabus
  • Schedule Please note that schedule changes may occur.
  • Course web: Athena
  • Exam information
    NOTE! Compulsory registration in due time for written exams. You sign up for the written exam through
  • Course literature:

    -Laffont, J.-J., and D. Martimort, The Theory of Incentives. The Principal-Agent Model, latest edition.
    -Articles. Full list to be announced on the course web