IDEAS home Printed from https://ideas.repec.org/p/syd/wpaper/2123-7533.html
   My bibliography  Save this paper

Equilibrium and Adverse Selection

Author

Listed:
  • Rose, Colin

Abstract

The nature of equilibrium in markets with adverse selection evoked considerable interest following George Akerlof's famous paper on the market for lemons. Whereas Akerlof argued that markets with adverse selection may yield no equilibrium, Charles Wilson has argued that multiple equilibria may result. In this paper, it is shown that if the distribution of quality follows some standard distribution, then a unique equilibrium will result. In the (less plausible) context of multiple-equilibria, conditions are derived under which both buyers and sellers will prefer higher price-equilibr ia.

Suggested Citation

  • Rose, Colin, 1992. "Equilibrium and Adverse Selection," Working Papers 173, University of Sydney, School of Economics.
  • Handle: RePEc:syd:wpaper:2123/7533
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/2123/7533
    Download Restriction: no
    ---><---

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:syd:wpaper:2123/7533. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Vanessa Holcombe (email available below). General contact details of provider: https://edirc.repec.org/data/deusyau.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.