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http://hdl.handle.net/10016/251
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| we014005.pdf | -- 2006-11-09 -- Available on Internet -- preprint | 437,27 kB | Adobe PDF | |  |
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| Title: | The efficiency of decentralized and centralized markets for lemons |
| Author(s): | Moreno, Diego [dmoreno]
Wooders, John |
| Issued date: | Jan-2001 |
| URI: | http://hdl.handle.net/10016/251 |
| Abstract: | In markets with adverse selection, when average quality is low and frictions are small decentralized trade produces a greater surplus than predicted by the competitive model: under decentralized trade some high-quality units of the good trade whereas, due to the "lemons problem", only low-quality units trade in the competitive equilibrium. This suggests a reason why these markets are often decentralized. Remarkably, under some conditions payoffs are competitive as frictions vanish, even though all qualities trade. |
| Serie / Nº.: | UC3M Working Paper. Economics
2001-05 |
| Appears in Collections: | DE - Working Papers. Economics. WE
Economists Online
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