Optimal policy in lemon markets with flexible information acquisition

Seungjun Baek

Economic Modelling, 2022, vol. 106, issue C

Abstract: I examine the impact of government interventions in lemon markets where buyers can acquire information about asset returns. In markets where the cost of information is high, direct asset purchases may cause welfare losses by crowding out private asset demand.

Keywords: Credit policy; Adverse selection; Information acquisition; Government asset purchases (search for similar items in EconPapers)
JEL-codes: D83 E44 E58 G14 G18 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:106:y:2022:i:c:s0264999321002583

DOI: 10.1016/j.econmod.2021.105669

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