Author: | Cabral, L. Sakovics, J. |
Title: | Must sell |
Journal: | Journal of Economics & Management Strategy
1995 : SPRING, VOL. 4:1, p. 55-68 |
Index terms: | BARGAINING ECONOMICS MARKETING |
Language: | eng |
Abstract: | Why are moving sales a successful and widespread phenomenon? How can it be optimal for a seller to disclose her low valuation for the item to be sold? The authors propose an explanation based on the "lemons problem" in bargaining with asymmetric information about quality. Disclosing a low valuation signals that there are significant gains from trade, so that trade takes place when it wouldn't otherwise, and all agents are made better off. |
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