Nonexclusive competition under adverse selection

, (), , () and , ()
Additional contact information
,: Toulouse School of Economics and Facoltà di Economia, Università degli Studi di Roma "Tor Vergata"
,: Toulouse School of Economics
,: Toulouse School of Economics
Authors registered in the RePEc Author Service: Andrea Attar and François Salanié

Theoretical Economics, 2014, vol. 9, issue 1

Abstract: A seller of a divisible good faces several identical buyers. The quality of the good may be low or high, and is the seller's private information. The seller has strictly convex preferences that satisfy a single-crossing property. Buyers compete by posting menus of nonexclusive contracts, so that the seller can simultaneously and privately trade with several buyers. We provide a necessary and sufficient condition for the existence of a pure-strategy equilibrium. Aggregate equilibrium trades are unique. Any traded contract must yield zero profit. If a quality is actually traded, then it is efficiently traded. Depending on parameters, both qualities may be traded, or only one of them, or the market may break down to a no-trade equilibrium.

Keywords: Adverse selection; competing mechanisms; nonexclusivity (search for similar items in EconPapers)
JEL-codes: D43 D82 D86 (search for similar items in EconPapers)
Date: 2014-02-05
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (43)

Downloads: (external link)
http://econtheory.org/ojs/index.php/te/article/viewFile/20140001/10202/303 (application/pdf)

Related works:
Working Paper: Non-Exclusive Competition under Adverse Selection (2011)
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:the:publsh:1126

Access Statistics for this article

Theoretical Economics is currently edited by Federico Echenique, Mira Frick, Pablo Kurlat, Juuso Toikka, Rakesh Vohra

More articles in Theoretical Economics from Econometric Society
Bibliographic data for series maintained by Martin J. Osborne ().