Game Theory and Asymmetric information

GAME THEORY AND ASYMMETRIC INFORMATION
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Introduction
The standard economic approach assumes that every commercial participant has his or her interest. But the assumption may not always be right, sometimes people act reasonably and treat others with care without only regarding on profit maximization (Dur, and Glazer, 2007, 120). Some experiments show that there is the presence of other preferences in the behavior of making decisions (Itoh, 2004, 20). The article explains the game theory and asymmetric data which can help economists in generating decisions on investment, output, price and the outcomes of making such choices.
Background and Significance
In the game setting, one section of the game understands something that a different part does not know (Lacomba, Lagos, and Perote, 2017, 5). In asymmetric data, one side in the industrial background may have more information compared to the other (Buckdahn, Quincampoix, Rainer and Xu, 2016, 800). One of the research is the analysis of the players in the market and assume that both have an individual interest.
Literature Review
Several authors agree that all players in the economy do not become motivated by personal interest some have a fair mind which regards on the appropriate treatment of employees (Li, Zhou and Wang, 2013, 2700). Ultimatum game argues that the boss might be affected by unequal treatment of workers.
Research Design and Methods
The research starts with employment of a worker after taking part in a project.

Then you observe the efforts of the worker and the cost of placing such efforts. You can then note the success or failure of your program (Einy, Haimanko, Orzach and Sela, 2016, 75). However, there might be challenges in the experiment due to lack of cooperation or early contract termination. According to Banerjee, and Sarkar (2017, 314), we can address these problems by looking for a more reliable source.
Preliminary Suppositions and Implications
The unequal payoff may cause the employee to retaliate which hurts the employer Masson, 2015, 1026). The employer, therefore, has to act in a fair-minded way but not a self-interest way to ensure the work goes on well. All parties in the game have to eliminate the emphasis on personal gains.
Conclusion
Game theories help many people in the market who give contracts to workers (Banerjee, 2013, 452). They create awareness that bosses should not only satisfy their interests. Instead, they should consider the view of other parties in their reasoning (Akerlof, 2012, par. 130). The asymmetric information has many uses in the field of auctioning where the seller must contemplate the price of the buyer.
References
Akerlof, R., 2012. A Theory of Authority. Browser Download This Paper.
BANERJEE, S 2013, ‘Gestational surrogacy contracts: altruistic or commercial? A contract theoretic approach* gestational surrogacy contracts: altruistic or commercial? A contract theoretic approach’, Manchester School (1463-6786), 81, 3, pp. 438-460, Business Source Complete, EBSCOhost, viewed 19 January 2018.
Banerjee, S. and Sarkar, M., 2017. Other‐regarding principal and moral hazard: The single‐agent case. International Journal of Economic Theory, 13(3), pp.313-326.
Buckdahn, R, Quincampoix, M, Rainer, C, & Xu, Y 2016, ‘Differential games with asymmetric information and without Isaacs’ condition’, International Journal Of Game Theory, 45, 4, pp. 795-816, Business Source Complete, EBSCOhost, viewed 19 January 2018.
Dur, R. and Glazer, A., 2007. Optimal contracts when a worker envies his boss. The Journal of Law, Economics, & Organization, 24(1), pp.120-137.
Einy, E, Haimanko, O, Orzach, R, & Sela, A, 2016, ‘Common-value all-pay auctions with asymmetric information and bid caps’, International Journal Of Game Theory, 45, 1/2, pp. 63-88, Business Source Complete, EBSCOhost, viewed 19 January 2018.
Itoh, H 2004, ‘Moral Hazard and Other-Regarding Preferences’, Japanese Economic Review, 55, 1, pp. 18-45, Business Source Complete, EBSCOhost, viewed 19 January 2018.
Lacomba, J, Lagos, F, & Perote, J 2017, ‘The Lazarillo’s game: Sharing resources with asymmetric conditions’, Plos ONE, 12, 7, pp. 1-14, Academic Search Premier, EBSCOhost, viewed 19 January 2018.
Li, B, Zhou, Y, & Wang, X 2013, ‘Equilibrium analysis of distribution channel structures under power imbalance and asymmetric information’, International Journal Of Production Research, 51, 9, pp. 2698-2714, Business Source Complete, EBSCOhost, viewed 19 January 2018.
Masson, V 2015, ‘Information, interaction and memory’, International Journal Of Game Theory, 44, 4, pp. 1015-1032, Business Source Complete, EBSCOhost, viewed 19 January 2018.