DECENTRALIZED TRADE MITIGATES THE LEMONS PROBLEM

• 成果类型: Article
• 署名作者: Moreno, Diego; Wooders, John
• 署名单位: University of Arizona; Universidad Carlos III de Madrid
• 刊物名称: INTERNATIONAL ECONOMIC REVIEW
• ISSN/ISSBN: 0020-6598
• DOI: 10.1111/j.1468-2354.2010.00584.x
• 发表日期: 2010
• 页码: 383-399
• 关键词: market; equilibrium; MODEL

摘要

In markets with adverse selection, only low-quality units trade in the competitive equilibrium when the average quality of the good held by sellers is low. We show that under decentralized trade, however, both high-and low-quality units trade, although with delay. Moreover, when frictions are small, the surplus realized is greater than the (static) competitive surplus. Thus, decentralized trade mitigates the lemons problem. Remarkably, payoffs are competitive as frictions vanish, even though both high-and low-quality units continue to trade, and there is trade at several prices.