Public vs. Private Offers in the Market for Lemons

Johannes Hoerner () and Nicolas Vieille
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Johannes Hoerner: Kellogg School of Management Northwestern University

No 813, 2006 Meeting Papers from Society for Economic Dynamics

Abstract: We analyze a version of Akerlof's market for lemons in which a sequence of buyers make offers to a long-lived seller endowed with a single unit for sale. We consider both the case in which previous offers are observable and the case in which they are not. When offers are observable, trade may only occur in the first period, so that the resulting inefficiency may be worse than in the static model. In the unobservable case, trade occurs with probability one eventually

Keywords: market for lemons; observability (search for similar items in EconPapers)
JEL-codes: C72 D82 D83 (search for similar items in EconPapers)
Date: 2006-12-03

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Persistent link: http://EconPapers.repec.org/RePEc:red:sed006:813

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