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Financial
economics :-------------
Financial economics is concerned with the allocation
of financial resources, in an uncertain environment.
Thus, its focus is on the operation of financial markets,
the pricing of financial instruments, and the financial
structure of companies. While it has traditionally been
considered a part of economics, today, finance has established
itself as a discipline in its own right.
Information economics :-------------
Information economics examines how information (or a
lack of it) affects economic decision-making. An important
focus is the concept of information asymmetry, where
one party has more or better information than the other.
The existence of information asymmetry gives rise to
problems such as moral hazard, and adverse selection,
studied in contract theory. The economics of information
has relevance in many fields, including insurance, contract
law, and decision-making under risk and uncertainty. |
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