In her memoir, accomplished economic historian (and my personal hero) Deirdre McCloskey, relates the conversation in which she informed her dean that she planned to transition from man to woman.* At the time, the dean joked that the change would be great for affirmative action (“one more woman, one less man!”) and meant that he would only have to pay her 70% of her current salary. I don’t think Prof. McCloskey was amused by the comment, but as her book reveals that was only the beginning of discovering what it means to be a woman in a male-dominated profession.
Tag: homosexuality (Page 2 of 2)
I have an idea for a Hollywood movie. An ambitious, young, heterosexual woman disguises herself as a lesbian in order to land herself the job of her dreams. Her handsome colleague takes her into his confidence and, of course, she falls in love with him. After a series of comedic events, she eventually gets her man and reconciles herself to mediocre wages, along with all the other heterosexual women. It could be a modern day “Twelfth Night.”
Asymmetric information, where one party in a transaction has more accurate information than the other, generally leads to inefficient markets. Formal legal institutions, such as those that make contracts enforceable, reduce the two problems created by asymmetric information: adverse selection and moral hazard. Adverse selection is asymmetric information before a transaction occurs and is a problem when the market attracts more buyers/sellers that we would rather avoid than those we want to do business with. Moral hazard is asymmetric information after the transaction has taken place and happens when the absence of formal commitment causes one party to behave in a way that disadvantages the other. Both of these problems can result in market failure when an otherwise willing participant in a market decides not to partake for fear of negative repercussions.