Dear all,
some of you asked whether and to what extent you need to memorize the model
I used to explain moral hazard and adverse selection in Lecture 3. The
answer is that you do have to be familiar with it and understand it to the
point where you could set it up yourself. I don't think that requires
memorizing anything; my sense is that the intuition is relatively
straightforward, so hopefully you can set it up based on that.
Best
Johannes