The provision of quality in a bilateral search market

Clara Ponsati and J?sef S?ovics

UFAE and IAE Working Papers from Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC)

Abstract: We accomplish two goals. First, we provide a non-cooperative foundation for the use of the Nash bargaining solution in search markets. This finding should help to close the rift between the search and the matching-and-bargaining literature. Second, we establish that the diversity of quality offered (at an increasing price-quality ratio) in a decentralized market is an equilibrium phenomenon - even in the limit as search frictions disappear.

Keywords: quality dispersion; Nash Program; bilateral search (search for similar items in EconPapers)
JEL-codes: C78 L11 (search for similar items in EconPapers)
Pages: 22
Date: 2002-08-02
New Economics Papers: this item is included in nep-mic
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Working Paper: The provision of quality in a bilateral search market (2002)
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Persistent link: https://EconPapers.repec.org/RePEc:aub:autbar:534.02

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