General Equilibrium Model for an Asymmetric Information Economy with Endogenous Resale Upperbounds

Ken Urai (), Akihiko Yoshimachi and Kohei Shiozawa ()
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Ken Urai: Graduate School of Economics, Osaka University
Akihiko Yoshimachi: Doshisha University
Kohei Shiozawa: Graduate School of Economics, Osaka University

No 13-27-Rev., Discussion Papers in Economics and Business from Osaka University, Graduate School of Economics

Abstract: In this paper, we introduce production and the resale problem into the general equilibrium model with asymmetric information proposed by Dubey et al. (2000, 2005). We found that the exogenous delivery upper bound is a crucial assumption for market equilibrium and optimality problems. Importantly, the typical equilibrium allocation of an asymmetric information economy is directly related to the exogenous upper bounds. Hence, to consider market viability problems, we extended the model by introducing an apparatus that expresses the natural costs of the market delivery, so that the delivery upper bounds are determined endogenously.

Keywords: General equilibrium model; asymmetric information; adverse selection; market unrav- eling; market viability problem (search for similar items in EconPapers)
JEL-codes: C62 D51 D82 (search for similar items in EconPapers)
Pages: 16 pages
Date: 2013-10, Revised 2015-07
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Persistent link: https://EconPapers.repec.org/RePEc:osk:wpaper:1327r

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