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Search with Adverse Selection

Author

Listed:
  • Asher Wolinsky
  • Stephan Lauermann

Abstract

The bargaining process is a critical part of the model. Due to the information asymmetry, we cannot use the simple surplus sharing solutions that are common in the search literature. Instead, we assume that the buyer has all the bargaining power and offers a general mechanism which the seller can either accept or reject. Thus, we model bargaining as a principal-agent problem, with the buyer being the informed principal as in Myerson (1983).

Suggested Citation

  • Asher Wolinsky & Stephan Lauermann, 2009. "Search with Adverse Selection," 2009 Meeting Papers 827, Society for Economic Dynamics.
  • Handle: RePEc:red:sed009:827
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    File URL: https://economicdynamics.org/meetpapers/2009/paper_827.pdf
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    Cited by:

    1. Simon Loertscher & Andras Niedermayer, 2008. "Fee Setting Intermediaries: On Real Estate Agents, Stock Brokers, and Auction Houses," Discussion Papers 1472, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
    2. Alp E. Atakan & Mehmet Ekmekci, 2014. "Auctions, Actions, and the Failure of Information Aggregation," American Economic Review, American Economic Association, vol. 104(7), pages 2014-2048, July.
    3. Vladimir Asriyan, 2017. "Information Aggregation in Dynamic Markets with Adverse Selection," 2017 Meeting Papers 988, Society for Economic Dynamics.
    4. Kyungmin Kim & Benjamin Lester & Braz Camargo, 2012. "Subsidizing Price Discovery," 2012 Meeting Papers 338, Society for Economic Dynamics.
    5. Zhiguo He & Konstantin Milbradt, 2012. "Endogenous Liquidity and Defaultable Bonds," NBER Working Papers 18408, National Bureau of Economic Research, Inc.
    6. Moreno, Diego & Wooders, John, 2016. "Dynamic markets for lemons: performance, liquidity, and policy intervention," Theoretical Economics, Econometric Society, vol. 11(2), May.
    7. Vladimir Asriyan & William Fuchs & Brett Green, 2017. "Information Aggregation in Dynamic Markets with Adverse Selection," Working Papers 979, Barcelona Graduate School of Economics.
    8. Rhodes, Andrew & Wilson, Chris M, 2015. "False Advertising," MPRA Paper 68869, University Library of Munich, Germany.
    9. Lucas Maestri & Dino Gerardi & Braz Camargo, 2016. "Efficiency in Decentralized Markets with Aggregate Uncertainty," 2016 Meeting Papers 103, Society for Economic Dynamics.
    10. Dilmé, Francesc, 2017. "Noisy signaling in discrete time," Journal of Mathematical Economics, Elsevier, vol. 68(C), pages 13-25.
    11. Peter Postl, 2011. "Efficiency vs Optimality in Procurement," Discussion Papers 11-03r, Department of Economics, University of Birmingham.
    12. repec:eee:jetheo:v:169:y:2017:i:c:p:365-399 is not listed on IDEAS
    13. Palazzo, Francesco, 2017. "Search costs and the severity of adverse selection," Research in Economics, Elsevier, vol. 71(1), pages 171-197.
    14. Anton Tsoy, 2016. "Liquidity and Prices in Decentralized Markets with Almost Public Information," 2016 Meeting Papers 8, Society for Economic Dynamics.
    15. Shengxing Zhang, 2012. "Liquidity Misallocation in an Over-The-Counter Market," 2012 Meeting Papers 529, Society for Economic Dynamics.
    16. Braz Camargo & Kyungmin Kim & Benjamin Lester, 2016. "Information Spillovers, Gains from Trade, and Interventions in Frozen Markets," Review of Financial Studies, Society for Financial Studies, vol. 29(5), pages 1291-1329.
    17. Peter Postl, 2013. "Efficiency versus optimality in procurement," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 53(2), pages 425-472, June.
    18. Etro, Federico, 2017. "Research in economics and game theory. A 70th anniversary," Research in Economics, Elsevier, vol. 71(1), pages 1-7.

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