Undergraduate Studies
Academic Year 2025-26
Economics of Information
Files and Links
- Course Outline .pdf (Greek)
- Course Outline .pdf (English)
- Full Description @courses.xrh
- Link to e-class
6th or 8th Semester
Course id
ECTS
Course type
After completing the “Information Economics ” course, students are expected to:
- Describe the different aspects of the market efficiency hypothesis
- Understand the concept of asymmetric information
- Describe the concept of market failure
- Distinguish between the primary and secondary markets
- Analyse the relationship between asymmetric information and the bid-ask spread in the organized market
- List the different manifestations of the concept of asymmetric information in the market such as front running
- Recognize the relationship of market efficiency in terms of information and the existence of information costs in the organized market
- Search, analysis and synthesis of data and information, using the necessary technologies
- Adaptation to new situations
- Decision making
- Independent work
- Teamwork
- Work in an international environment
- Work in an interdisciplinary environment
- Exercise of criticism and self-criticism
- Production of free, creative and inductive thinking
The course purpose is to present the concept and role of information in the context of the market microstructure literature. The course introduction includes the definition of an organised (primary and secondary) market, the equilibrium of a market under conditions of complete information and the equilibrium under asymmetric information (market participants with different information sets). Among others, the following key concepts will be examined:
- The different forms of market efficiency (special focus on informational efficiency)
- The concept of asymmetric information (Stiglitz [22])
- Market failure (Akerlof [1])
- Private and public information
- The concept of market microstructure (O’Hara [17], Hasbrouck [13])
- The relationship between asymmetric information in the context of the secondary market
- The relationship between information, market efficiency and price disclosure (Grossman & Stiglitz [12], among others).
- Algorithmic trading and high-frequency trading (O’Hara [18])
- High-frequency transactions and the Grossman & Stiglitz [12] paradox (Stiglitz [21]).
- The different manifestations of asymmetric information in the market, including front running, insider trading, predatory trading, trading on rumors, etc. (Brunnermeier [4], Brunnermeier & Pedersen [6] among others)
- The relationship between asymmetric information and market liquidity (Foucault et al. [9])
In this context, a series of market microstructure models that include the concept of asymmetric information will be analyzed in detail. Interest will be focused on (simultaneous or sequential) trading asymmetric information models ((Kyle [15]) and (Glosten & Milgrom [10]) respectively). The role of liquidity and asymmetric information in the 2008 Global Financial Crisis of 2008 (Gorton & Metrick [11]) will be examined also as well as in the recent reform process of the key benchmark rates (USA, Eurozone, United Kingdom, Japan, etc.)( Duffie & Stein [8]).
