Artikel

A scent of lemon-seller meets buyer with a noisy quality observation

We consider a market for lemons in which the seller is a monopolistic price setter and the buyer receives a private noisy signal of the product's quality. We model this as a game and analyze perfect Bayesian equilibrium prices, trading probabilities and gains of trade. In particular, we vary the buyer's signal precision, from being completely uninformative, as in standard models of lemons markets, to being perfectly informative. We show that high quality units are sold with positive probability even in the limit of uninformative signals, and we identify some discontinuities in the equilibrium predictions at the boundaries of completely uninformative and completely informative signals, respectively.

Sprache
Englisch

Erschienen in
Journal: Games ; ISSN: 2073-4336 ; Volume: 2 ; Year: 2011 ; Issue: 1 ; Pages: 163-186 ; Basel: MDPI

Klassifikation
Wirtschaft
Thema
lemons
adverse selection
noisy quality signals
two-sided incomplete information

Ereignis
Geistige Schöpfung
(wer)
Voorneveld, Mark
Weibull, Jörgen W.
Ereignis
Veröffentlichung
(wer)
MDPI
(wo)
Basel
(wann)
2011

DOI
doi:10.3390/g2010163
Handle
Letzte Aktualisierung
20.09.2024, 08:23 MESZ

Datenpartner

Dieses Objekt wird bereitgestellt von:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.

Objekttyp

  • Artikel

Beteiligte

  • Voorneveld, Mark
  • Weibull, Jörgen W.
  • MDPI

Entstanden

  • 2011

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