The provision of quality in a bilateral search market
AbstractWe accomplish two goals. First, we provide a non-cooperative foundation for the use of the Nash bargaining solution in search markets. This finding should help to close the rift between the search and the matching-and-bargaining literature. Second, we establish that the diversity of quality offered (at an increasing price-quality ratio) in a decentralized market is an equilibrium phenomenon -even in the limit as search frictions disappear.
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Bibliographic InfoPaper provided by Edinburgh School of Economics, University of Edinburgh in its series ESE Discussion Papers with number 86.
Date of creation: Mar 2004
Date of revision:
quality dispersion; Nash Program; bilateral search.;
Other versions of this item:
- Clara Ponsat?Author-Email: Clara.firstname.lastname@example.org & J?sef S?ovics, 2002. "The provision of quality in a bilateral search market," UFAE and IAE Working Papers 534.02, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
- C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
- L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
This paper has been announced in the following NEP Reports:
- NEP-ALL-2004-03-14 (All new papers)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Bester, Helmut, 1988.
"Bargaining, Search Costs and Equilibrium Price Distributions,"
Review of Economic Studies,
Wiley Blackwell, vol. 55(2), pages 201-14, April.
- Bester,Helmut, 1986. "Bargaining,Search costs and equilibrium price distribution," Discussion Paper Serie A 49, University of Bonn, Germany.
- Sakovics, J. & Ponsati, C., 1995. "Rubinstein Batgaining with Tow-Sided Options," UFAE and IAE Working Papers 318.95, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
- Binmore, K.G. & Shaked, A. & Sutton, J., 1989. "An outside option experiment," Open Access publications from University College London http://discovery.ucl.ac.u, University College London.
- Bester, Helmut, 1993. "Bargaining versus Price Competition in Markets with Quality Uncertainty," American Economic Review, American Economic Association, vol. 83(1), pages 278-88, March.
- John C. Harsanyi & Reinhard Selten, 1972. "A Generalized Nash Solution for Two-Person Bargaining Games with Incomplete Information," Management Science, INFORMS, vol. 18(5-Part-2), pages 80-106, January.
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