What problems of moral hazard and/or adverse selection
arise in your dealings with each of the following? In each case, outline some
appropriate incentive schemes and/or signaling and screening strategies to cope
with these problems. No mathematical analysis is expected, but you should state
clearly the economic reasoning of why and how your suggested methods work.
(a) Your financial adviser tells you what stocks to buy
(b) You consult a realtor when you are selling your
(c) You visit your doctor, whether for routine check-ups