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Information about sellers' past behavior in the market for lemons

Listed author(s):
  • Kim, Kyungmin
Registered author(s):

    This paper studies the role of time-on-the-market information in dynamic trading environments under adverse selection. I consider a sequential search model in which (informed) sellers receive price offers from (uninformed) buyers and analyze both the case in which buyers receive no information about sellers' trading histories and the case in which buyers observe sellers' time-on-the-market. I analyze how the observability of time-on-the-market influences agents' trading behavior and investigate its welfare implications in both the single-seller environment and the stationary market environment.

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    File URL: http://www.sciencedirect.com/science/article/pii/S0022053117300297
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    Article provided by Elsevier in its journal Journal of Economic Theory.

    Volume (Year): 169 (2017)
    Issue (Month): C ()
    Pages: 365-399

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    Handle: RePEc:eee:jetheo:v:169:y:2017:i:c:p:365-399
    DOI: 10.1016/j.jet.2017.02.012
    Contact details of provider: Web page: http://www.elsevier.com/locate/inca/622869

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    23. Paul R. Milgrom, 1981. "Good News and Bad News: Representation Theorems and Applications," Bell Journal of Economics, The RAND Corporation, vol. 12(2), pages 380-391, Autumn.
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