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Information design in the holdup problem
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Condorelli, Daniele and Szentes, Balázs (2020) Information design in the holdup problem. Journal of Political Economy, 128 (2). pp. 681-709. doi:10.1086/704574 (In Press)
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WRAP-information-design-holdup-problem-Condorelli-2020.pdf - Accepted Version Embargoed item. Restricted access to Repository staff only until 9 January 2021. Contact author directly, specifying your specific needs. - Requires a PDF viewer. Download (993Kb) |
Official URL: http://dx.doi.org/10.1086/704574
Abstract
We analyze a bilateral trade model where the buyer chooses the distribution of her valuation for the good. The seller, after observing the buyer’s distribution but not the realized valuation, makes a take-it-or-leave-it offer. If distributions are costless, the price and the payoffs of both the buyer and the seller are shown to be 1/e in the unique equilibrium outcome. The buyer’s equilibrium distribution generates a unit-elastic demand, and trade is ex post efficient. These properties are shown to be preserved even when different distributions are differentially costly as long as the cost is monotone in the dispersion of the distribution.
| Item Type: | Journal Article | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| Subjects: | H Social Sciences > HB Economic Theory | ||||||||
| Divisions: | Faculty of Social Sciences > Economics | ||||||||
| Library of Congress Subject Headings (LCSH): | Economics -- Decision making, Information technology -- Economic aspects, Communication -- Technological innovations | ||||||||
| Journal or Publication Title: | Journal of Political Economy | ||||||||
| Publisher: | University of Chicago Press | ||||||||
| ISSN: | 0022-3808 | ||||||||
| Official Date: | February 2020 | ||||||||
| Dates: |
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| Date of first compliant deposit: | 20 January 2020 | ||||||||
| Volume: | 128 | ||||||||
| Number: | 2 | ||||||||
| Page Range: | pp. 681-709 | ||||||||
| DOI: | 10.1086/704574 | ||||||||
| Status: | Peer Reviewed | ||||||||
| Publication Status: | In Press | ||||||||
| Publisher Statement: | © 2020 by The University of Chicago. Accepted for publication to Journal of Political Economy on 09/01/2020 | ||||||||
| Access rights to Published version: | Restricted or Subscription Access |
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