IDEAS home Printed from https://ideas.repec.org/p/hhs/iuiwop/0268.html
   My bibliography  Save this paper

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

    Download full text from publisher

    File URL: https://www.ifn.se/wfiles/wp/wp268.pdf
    Download Restriction: no
    ---><---

    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. repec:bla:scandj:v:79:y:1977:i:1:p:20-40 is not listed on IDEAS
    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)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Eric Budish & Robin S. Lee & John J. Shim, 2024. "A Theory of Stock Exchange Competition and Innovation: Will the Market Fix the Market?," Journal of Political Economy, University of Chicago Press, vol. 132(4), pages 1209-1246.
    2. Joseph E. Stiglitz, 1989. "Symposium on Microeconomics: 1 Reflections on the State of Economics: 1988," The Economic Record, The Economic Society of Australia, vol. 65(1), pages 66-72, March.
    3. Damien Gaumont & Martin Schindler & Randall Wright, 2006. "Alternative Theories of Wage Dispersion," Contributions to Economic Analysis, in: Structural Models of Wage and Employment Dynamics, pages 61-82, Emerald Group Publishing Limited.
    4. Fishman, Arthur & Simhon, Avi, 2003. "Can Income Equality Increase Competitiveness?," Discussion Papers 14983, Hebrew University of Jerusalem, Department of Agricultural Economics and Management.
    5. Talmain, Gabriel, 1992. "Search from an unkown distribution an explicit solution," Journal of Economic Theory, Elsevier, vol. 57(1), pages 141-157.
    6. Garcia, René, 1986. "La théorie économique de l’information : exposé synthétique de la littérature," L'Actualité Economique, Société Canadienne de Science Economique, vol. 62(1), pages 88-109, mars.
    7. Andrea Attar & Thomas Mariotti & François Salanié, 2020. "The Social Costs of Side Trading," The Economic Journal, Royal Economic Society, vol. 130(630), pages 1608-1622.
    8. Atabek Atayev, 2021. "Nonlinear Prices, Homogeneous Goods, Search," Papers 2109.15198, arXiv.org.
    9. repec:ebl:ecbull:v:5:y:2008:i:7:p:1-7 is not listed on IDEAS
    10. Arbatskaya, Maria & Konishi, Hideo, 2012. "Referrals in search markets," International Journal of Industrial Organization, Elsevier, vol. 30(1), pages 89-101.
    11. Dirk Bergemann & Alessandro Bonatti, 2024. "Data, Competition, and Digital Platforms," American Economic Review, American Economic Association, vol. 114(8), pages 2553-2595, August.
    12. Dionne, Georges, 1998. "La mesure empirique des problèmes d’information," L'Actualité Economique, Société Canadienne de Science Economique, vol. 74(4), pages 585-606, décembre.
    13. Maryam Farboodi & Gregor Jarosch & Guido Menzio, 2016. "Intermediation as Rent Extraction," PIER Working Paper Archive 16-026, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania, revised 01 Dec 2016.
    14. Alexandre de Corniere, 2013. "Search Advertising," Economics Series Working Papers 649, University of Oxford, Department of Economics.
    15. Andrew Rhodes & Jidong Zhou, 2019. "Consumer Search and Retail Market Structure," Management Science, INFORMS, vol. 67(6), pages 2607-2623, June.
    16. Dosis, Anastasios, 2016. "Bertand Competition and the Existence of Pure Strategy Nash Equilibrium in Markets with Adverse Selection," ESSEC Working Papers WP1606, ESSEC Research Center, ESSEC Business School.
    17. Soeiro, Renato & Adrego Pinto, Alberto, 2019. "Social power as a solution to the Bertrand Paradox," MPRA Paper 94271, University Library of Munich, Germany.
    18. Stuart Baumann & Margaryta Klymak, 2017. "It's Good to be Bad. A Model of Low Quality Dominance in a Full Information Consumer Search Market," Edinburgh School of Economics Discussion Paper Series 280, Edinburgh School of Economics, University of Edinburgh.
    19. Pak Hung Au & Mark Whitmeyer, 2018. "Attraction versus Persuasion: Information Provision in Search Markets," Papers 1802.09396, arXiv.org, revised May 2022.
    20. Kifmann, Mathias, 2002. "Community rating in health insurance and different benefit packages," Journal of Health Economics, Elsevier, vol. 21(5), pages 719-737, September.
    21. Koo, Bonwoo & Mantin, Benny & O'Connor, Peter, 2011. "Online distribution of airline tickets: Should airlines adopt a single or a multi-channel approach?," Tourism Management, Elsevier, vol. 32(1), pages 69-74.

    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

    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:hhs:iuiwop:0268. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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: Elisabeth Gustafsson (email available below). General contact details of provider: https://edirc.repec.org/data/iuiiise.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.