Competitive markets with private information on both sides

Martin Meier (), Enrico Minelli and Herakles Polemarchakis ()

Economic Theory, 2014, vol. 55, issue 2, 257-280

Abstract: We consider competitive markets with asymmetric information. We define a notion of equilibrium that allows individuals to act strategically both as buyers and as sellers. In an example, the wage is common to all types of labor, and it does not reveal information concerning the skill levels of workers. However, at the solution we propose, an informed firm can take advantage of its superior information: it can choose the extent to which it concentrates its employment offers to workers of different types. The probabilities that offers to workers of different types produce a hire are treated parametrically by firms who have correct expectations about them, and firms forego the wage when they extend an offer whether the offer is successful or not. In a general framework, we prove that equilibria exist. Copyright Springer-Verlag Berlin Heidelberg 2014

Keywords: Competitive markets; Asymmetric information; Large games; D50; D52; D82 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
http://hdl.handle.net/10.1007/s00199-013-0754-2 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:joecth:v:55:y:2014:i:2:p:257-280

Ordering information: This journal article can be ordered from
http://www.springer. ... eory/journal/199/PS2

DOI: 10.1007/s00199-013-0754-2

Access Statistics for this article

Economic Theory is currently edited by Nichoals Yanneils

More articles in Economic Theory from Springer, Society for the Advancement of Economic Theory (SAET) Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().