Question
ECO 550
Due August 15 2019
Assignment: Dealing with Risk, Asymmetric Information, and
Incentives
Earlier in the quarter we discussed Southwest Airlines’ use
of game theory to create new strategy. Continue to research
Southwest Airlines or a company of your choice and write a six to
eight (6-8) page paper in which you:
1. Evaluate a company’s recent (with in the last year)
actions dealing with risk and uncertainty.
2. Offer advice for improving risk management.
3. Examine an adverse selection problem your company is
facing and recommend how it should minimize its negative impact on
transactions.
4. Determine the ways your company is dealing with the moral
hazard problem and suggest best practices used in the industry to
deal with it.
5. Identify a principal-agent problem in your company and
evaluate the tools it uses to align incentives and improve
profitability.
6. Examine the organizational structure of your company and
suggests ways it can be changed to improve the overall
profitability.
7. Use the online library at to find at least five (5)
quality academic resources in this assignment. Note: One of your
references regarding your should have been published within the
last 6 months. Note: Wikipedia does not qualify as an academic
resource.
Your assignment must follow these formatting requirements:
· Be typed, double spaced, using Times New Roman font (size
12), with one-inch margins on all sides; citations and references
must follow APA or school-specific format. Check with your
professor for any additional instructions.
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