Information about sellers' past behavior in the market for lemons

Research output: Contribution to journalArticle

5 Scopus citations

Abstract

This paper studies the role of time-on-the-market information in dynamic trading environments under adverse selection. I consider a sequential search model in which (informed) sellers receive price offers from (uninformed) buyers and analyze both the case in which buyers receive no information about sellers' trading histories and the case in which buyers observe sellers' time-on-the-market. I analyze how the observability of time-on-the-market influences agents' trading behavior and investigate its welfare implications in both the single-seller environment and the stationary market environment.

Original languageEnglish (US)
Pages (from-to)365-399
Number of pages35
JournalJournal of Economic Theory
Volume169
DOIs
StatePublished - May 1 2017

Keywords

  • Adverse selection
  • Sequential search
  • Time-on-the-market

ASJC Scopus subject areas

  • Economics and Econometrics

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