Matching markets with adverse selection

• 成果类型: Article
• 署名作者: Inderst, R
• 署名单位: University of London; London School Economics & Political Science; University of London; London School Economics & Political Science
• 刊物名称: JOURNAL OF ECONOMIC THEORY
• ISSN/ISSBN: 0022-0531
• DOI: 10.1016/j.jet.2004.03.006
• 发表日期: 2005
• 页码: 145-166
• 关键词: Adverse selection; screening; matching markets

摘要

This paper considers a market with adverse selection in the spirit of Rothschild and Stiglitz (Quart. J. Econ. 90 (1976) 629). The major departure from existing approaches is that we model a decentralized market that is open-ended and constantly refilled by new participants, e.g., by new workers and firms in the case of a labor market. The major novelty of this approach is that the distribution of types in the market becomes an endogenous variable, which is jointly determined with equilibrium contracts. As frictions become small, we show that the least-cost separating contracts are always supported as an equilibrium outcome, regardless of the distribution of types among entrants. Moreover, we derive conditions under which this outcome is also unique. (c) 2004 Elsevier Inc. All rights reserved.