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Equilibrium in Search Models with Adverse Selection

Author

Listed:
  • Albrecht, James W.

    (Georgetown University)

  • Vroman, Susan B.

    (Georgetown University)

Abstract

This paper examines the problem of nonexistence of equilibrium in a simple search model with asymmetric information. A pure-strategy, symmetric Nash equilibrium fails to exist because adverse selection arising from steady-state considerations causes a nonconcavity in the payoff function.

Suggested Citation

  • Albrecht, James W. & Vroman, Susan B., 1990. "Equilibrium in Search Models with Adverse Selection," Working Paper Series 268, Research Institute of Industrial Economics.
    • Handle: RePEc:hhs:iuiwop:0268
    as

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    References listed on IDEAS

    as
    1. Albrecht, James W & Jovanovic, Boyan, 1986. "The Efficiency of Search under Competition and Monopsony," Journal of Political Economy, University of Chicago Press, vol. 94(6), pages 1246-1257, December.
    2. Axel, Bo, 1977. " Search Market Equilibrium," Scandinavian Journal of Economics, Wiley Blackwell, vol. 79(1), pages 20-40.
    3. Diamond, Peter A., 1971. "A model of price adjustment," Journal of Economic Theory, Elsevier, vol. 3(2), pages 156-168, June.
    4. Wilson, Charles, 1977. "A model of insurance markets with incomplete information," Journal of Economic Theory, Elsevier, vol. 16(2), pages 167-207, December.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Nash equilibria; Informational asymmetry; Search model;
    All these keywords.

    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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