Bargaining over a Divisible Good in the Market for Lemons

Dino Gerardi, Lucas Maestri and Ignacio Monzon
Additional contact information
Lucas Maestri: FGV/EPGE

No 111, Working Papers from Red Nacional de Investigadores en Economía (RedNIE)

Abstract: We study bargaining with divisibility and interdependent values. A buyer and a seller trade a divisible good. The seller is privately informed about its quality, which can be high or low. Gains from trade are positive and decreasing. The buyer makes offers over time. Divisibility introduces a new channel of competition between the buyer’s present and future selves. The buyer’s temptation to split the purchases of the high-quality good is detrimental to him. As bargaining frictions vanish and the good becomes arbitrarily divisible, the high-quality good is traded smoothly over time and the buyer’s payoff shrinks to zero.

Keywords: : bargaining; gradual sale; Coase conjecture; divisible objects; interdependent valuations; market for lemons. (search for similar items in EconPapers)
Pages: 75 pages
Date: 2022-01
New Economics Papers: this item is included in nep-com, nep-gth, nep-mic and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://rednie.eco.unc.edu.ar/files/DT/111.pdf (application/pdf)

Related works:
Journal Article: Bargaining over a Divisible Good in the Market for Lemons (2022)
Working Paper: Bargaining over a divisible good in the market for lemons (2020)
Working Paper: Bargaining over a Divisible Good in the Market for Lemons (2013)
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:aoz:wpaper:111

Access Statistics for this paper

More papers in Working Papers from Red Nacional de Investigadores en Economía (RedNIE) Contact information at EDIRC.
Bibliographic data for series maintained by Laura Inés D Amato ().