The Externality of Hidden Actions
A core principle in economics is that when an individual's actions create uncompensated costs or benefits for others, the market outcome is often inefficient. Explain how the problem of a 'hidden action' fits this principle. In your explanation, identify who bears the private cost, who receives the external benefit, and why the resulting level of the agent's action is inefficient from a societal perspective.
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The Economy 2.0 Microeconomics @ CORE Econ
Ch.10 Market successes and failures: The societal effects of private decisions - The Economy 2.0 Microeconomics @ CORE Econ
Introduction to Microeconomics Course
Analysis in Bloom's Taxonomy
Cognitive Psychology
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The Externality of Hidden Actions
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The Externality of Hidden Actions