Cycles and Multiple Equilibria in the Market for Durable Lemons

Vladimir Karamychev
Authors registered in the RePEc Author Service: Maarten Janssen

No 876, Econometric Society World Congress 2000 Contributed Papers from Econometric Society

Abstract: We investigate the nature of market failure in a dynamic version of Akerlof (1970) where identical cohorts of a durable good enter the market over time. In the dynamic model, equilibria with qualitatively different properties emerge. Typically, in equilibria of the dynamic model, sellers with higher quality wait in order to sell and wait more than sellers of lower quality. Among other things, we show for any distribution of quality that there exist an infinite number of cyclical equilibria where all goods are traded within a certain number of periods after entering the market.

Date: 2000-08-01
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Citations: View citations in EconPapers (2)

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Related works:
Journal Article: Cycles and multiple equilibria in the market for durable lemons (2002)
Working Paper: Cycles and Multiple Equilibria in the Market for Durable Lemons (2000)
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