search query: @author Kessler, A. S. / total: 4
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| Author: | Kessler, A. S. |
| Title: | Revisiting The Lemons Market |
| Journal: | International Economic Review
2001 : FEB, VOL. 42:1, p. 25-42 |
| Index terms: | CAR RETAIL INDUSTRY SELLING INFORMATION |
| Language: | eng |
| Abstract: | The author analyze how market performance in an adverse selection model depends on the information structure of sellers. This article extends the standard competitive adverse selection model by allowing for qualitatively different information structures of agents on the informed side of the market. Using the stylised framework of the market for used cars, the author examines the welfare properties of equilibria under the assumption that a fraction of the sellers remains uninformed about a parameter that is relevant for their own transaction. Whether market performance increases or decreases in the number of uninformed sellers is shown to depend on (1) the potential gains from trade in the market and (2) the average quality of the sellers' information structure. |
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