This dissertation has three chapters, each concentrating on a distinct aspect of information asymmetry. Each chapter approaches information asymmetry from a unique perspective: the first chapter explores a scenario with both hidden information and hidden action. The second chapter discusses another type of information asymmetry related to population uncertainty. Finally, the third chapter focuses on a natural result of information asymmetry --- discrimination. Chapter one explores a situation in which managers rely on their subordinates for local information that aids decision-making but cannot commit to a decision rule. When the firm and the workers have conflicting interests on how such information gets used, incentives for effort and information elicitation become intertwined. We explore how one may solve this incentive problem through job design --- the choice between "individual assignment'' where all tasks in a given job are assigned to the same worker, and "team assignment'' where the tasks are split among a group. Team assignment facilitates information elicitation but suffers from "diseconomies of scope'' in incentive provision. This trade-off drives the optimal job design, and it is shaped by two key parameters --- the workers' ex-ante likelihood of being informed and the noise in the performance measure that is used to reward the worker. The individual assignment is optimal when the performance measure is well-aligned, but the team is optimal when the measure is noisy, and the workers are highly likely to be informed about the local conditions. In chapter two, I study a contest with population uncertainty in which the value of the prize depends on the number of participants. There is friction between a contestant's perspective and an outsider's perspective regarding the number of contestants. This discrepancy drives the main result: under the assumption that the expected value of the prize is the same across all environments, if the value of the prize increases in the number of players, the players exert more effort; whereas, if the value of the prize declines in the number of players, the players exert less effort. In the third chapter, I focus on discriminating as a consequence of information asymmetry. I construct a two-stage assimilation model to analyze the discrimination level in groups with different discount factors. I have three main results: First, there always exists an equilibrium for any discount factors and minority group size; the equilibrium will have an on-path action profile with a cutoff rule; second, as group size increases, both discrimination level and the ability cutoff will increase; third, when discount factors vary across different regimes, the effect is not monotonic.
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