ULMS Electronic Module Catalogue

The information contained in this module specification was correct at the time of publication but may be subject to change, either during the session because of unforeseen circumstances, or following review of the module at the end of the session. Queries about the module should be directed to the member of staff with responsibility for the module.
Code ECON342
Coordinator Dr E Hengel
Year CATS Level Semester CATS Value
Session 2020-21 Level 6 FHEQ First Semester 15

Pre-requisites before taking this module (other modules and/or general educational/academic requirements):


Modules for which this module is a pre-requisite:


Programme(s) (including Year of Study) to which this module is available on a required basis:


Programme(s) (including Year of Study) to which this module is available on an optional basis:


Teaching Schedule

  Lectures Seminars Tutorials Lab Practicals Fieldwork Placement Other TOTAL
Study Hours     12



Timetable (if known)     60 mins X 1 totaling 12
    120 mins X 1 totaling 24
Private Study 106


EXAM Duration Timing
% of
Penalty for late
CONTINUOUS Duration Timing
% of
Penalty for late
Assessment 2: Take home open book synoptic assessment Assessment Type: Coursework Duration: 72 Hours Weighting: 100% Reassessment Opportunity: Yes Penalty for Late Submission: Standard UoL   72 hours    100       


This module aims to provide an understanding of the market failure resulting from asymmetric information. The course covers some of the canonical models of adverse selection and moral hazard focussing on the design of optimal contracts under informational asymmetries.

Learning Outcomes

(LO1) Solve simple economic models

(LO2) Understand underlying assumptions

(LO3) Understand theorems and key proofs

(LO4) Predict the choices of economic agents

(S1) problem solving skills

(S2) numeracy

(S3) Communication skills

Teaching and Learning Strategies

Teaching Delivery: Mixed, Hybrid delivery with social distancing on campus.

Teaching Method: Online Asynchronous Learning materials
Description: Learning materials will provide an introduction and organised framework of analysis for core topics, as well as relevant analytical and problem-solving techniques.
Unscheduled Directed Student Hours: 20
Attendance Recorded: Yes

Teaching Method: Tutorial
Description: The seminar/tutorial programme will provide structured practice in core analytical and problem-solving methods applicable to each topic, strengthen student intuition regarding the nature of particular issues in microeconomic analysis and their methods of analysis and solution and also provide a forum in which students can clarify areas of partial understanding with the tutor. Moreover, It will allow the students to discuss possible extensions of the basic analysis presented in class.
Scheduled Directed Student Hours: 10
Attendance Recorded: Yes

Teaching Delivery: Group Study
Scheduled Student Hours: 12
Attendance Recorded: Yes

Self-Directed Learning Hours: 106

Costs Information:
No additional costs for students associated with this module

There are the following non-modular requirements:
ECON221 and ECON222

Skills/Other Attributes Mapping

Skills / attributes: Communication skills
How this is developed: seminar/tutorial
Mode of assessment (if applicable)

Skills / attributes: numeracy
How this is developed: seminar/tutorial
Mode of assessment (if applicable): Mid-term test and Examination

Skills / attributes: problem solving skills
How this is developed: lecture and seminar/tutorial
Mode of assessment (if applicable): Examination



Topic 1: Introduction
Topic 2: The basic adverse selection model
Topic 3: The revelation principle
Topic 4: The generalized adverse selection problem
Topic 5: The basic moral hazard problem
Topic 5a: The risk versus efficiency trade-off
Topic 5b: The rent versus efficiency trade-off
Topic 5c: The multitasking problem
Topic 6: Special Issues

Recommended Texts

Reading lists are managed at readinglists.liverpool.ac.uk. Click here to access the reading lists for this module.