scholarly journals Constrained efficiency with adverse selection and directed search

2019 ◽  
Vol 183 ◽  
pp. 568-593 ◽  
Author(s):  
Seyed Mohammadreza Davoodalhosseini
Keyword(s):  
Adverse Selection ◽  
Directed Search ◽  
Constrained Efficiency

scholarly journals Competing mechanisms in markets for lemons

2019 ◽  
Vol 14 (3) ◽  
pp. 927-970 ◽  
Author(s):  
Sarah Auster ◽  
Piero Gottardi
Keyword(s):  
Adverse Selection ◽  
Traditional Approach ◽  
Directed Search ◽  
High Type ◽  
Trading Mechanisms ◽  
Decentralized Market

We study directed search equilibria in a decentralized market with adverse selection, where uninformed buyers post general trading mechanisms and informed sellers select one of them. We show that this has differing and significant implications with respect to the traditional approach, based on bilateral contracting between the parties. In equilibrium, all buyers post the same mechanism and low‐quality sellers receive priority in any meeting with a buyer. Also, buyers make strictly higher profits with low‐ than with high‐type sellers. When adverse selection is severe, the equilibrium features rationing and is constrained inefficient. Compared to the equilibrium with bilateral contracting, the equilibrium with general mechanisms yields a higher surplus for most, but not all, parameter specifications.

The Self-Directed Search / A Comment on the Reviews of the Self-Directed Search

1977 ◽  
Vol 10 (2) ◽  
pp. 117-128 ◽  
Author(s):  
Catherine C. Cutts ◽  
Robert H. Dolliver ◽  
Robert N. Hansen ◽  
John L. Holland
Keyword(s):  
The Self ◽  
Directed Search
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