SEARCH, ADVERSE SELECTION, AND MARKET CLEARING

• 成果类型: Article
• 署名作者: Cho, In-Koo; Matsui, Akihiko
• 署名单位: University of Illinois System; University of Illinois Urbana-Champaign; Hanyang University; Federal Reserve System - USA; Federal Reserve Bank - St. Louis; University of Tokyo
• 刊物名称: INTERNATIONAL ECONOMIC REVIEW
• ISSN/ISSBN: 0020-6598
• DOI: 10.1111/iere.12309
• 发表日期: 2018
• 页码: 1437-1467
• 关键词: competitive-equilibrium; INFORMATION; unemployment; uncertainty; lemons

摘要

We examine a dynamic decentralized trading model with infinitesimal sellers and buyers to investigate whether or not the market fails to clear in the limit of search friction vanishing. A seller, who has private information about product quality, and a buyer are matched to bargain over price. They form a long-term relationship if they reach agreement. They return to the matching pool if they fail to agree or the existing relationship is dissolved. The market fails to clear if and only if the ratio of agents' patience over the dissolution rate exceeds a threshold.