Equilibrium and Adverse Selection
AbstractThe nature of equilibrium in markets with adverse selection evoked considerable interest following George Akerlof's seminal article on the market for lemons. Akerlof argued that markets with adverse selection may yield no equilibrium. Charles Wilson has subsequently argued that multiple equilibria may result. In this article it is shown that if the distribution of quality follows some standard distribution, then a unique equilibrium will result.
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Bibliographic InfoArticle provided by The RAND Corporation in its journal RAND Journal of Economics.
Volume (Year): 24 (1993)
Issue (Month): 4 (Winter)
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Web page: http://www.rje.org
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- Panu Poutvaara & Andreas Wagener, 2004.
"The Invisible Hand Plays Dice: Eventualities in Religious Markets,"
- Panu Poutvaara & Andreas Wagener, 2004. "The Invisible Hand Plays Dice: Eventualities in Religious Markets," CESifo Working Paper Series 1238, CESifo Group Munich.
- Carl Davidson & Nicholas Sly, 2013. "A Simple Model of Globalization, Schooling and Skill Acquisition," CESifo Working Paper Series 4394, CESifo Group Munich.
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