Market Behaviour, Information Asymmetries and Product Qualities
The importance of informational aspects of market processes has received considerable attention. This paper considers the problem of adverse selection and the possible outcomes under different risk behaviour assumptions.The paper is structured as follows : section II presents briefly some general implications of risk aversive behaviour. Two common measures of risk are introduced and the possibility of using a mean-variance analysis in considering types of risk behaviour is discussed. Section III then analyses Akerlof's model under the assumption of risk aversive behaviour. It is shown that the introduction of risk aversive behaviour strengthens the adverse selection process, having an even greater negative effect upon the market structure. Finally, section IV draws some general conclusions about the process of adverse selection and briefly discusses possible counteracting institutions.
|Date of creation:||1988|
|Contact details of provider:|| Postal: Ludwigstraße 33, D-80539 Munich, Germany|
Web page: https://mpra.ub.uni-muenchen.de
More information through EDIRC
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.:
- Broll, Udo & Gilroy, Michael B, 1986.
"Collateral in Banking Policy and Adverse Selection,"
The Manchester School of Economic & Social Studies,
University of Manchester, vol. 54(4), pages 357-366, December.
- Gilroy, Bernard Michael & Broll, Udo, 1986. "Collateral in Banking Policy and Adverse Selection," MPRA Paper 18709, University Library of Munich, Germany.
When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:18655. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Joachim Winter)
If references are entirely missing, you can add them using this form.