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Imperfect competition and efficiency in lemons markets
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Muthoo, Abhinay and Mutuswami, Suresh (2010) Imperfect competition and efficiency in lemons markets. Working Paper. Coventry: University of Warwick. Dept. of Economics. Warwick economics research paper series (TWERPS), Vol.2010 (No.939).
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Official URL: http://www2.warwick.ac.uk/fac/soc/economics/resear...
Abstract
This paper studies the impact of competition on the degree of inefficiency in lemons markets. More precisely, we characterize the second-best mechanism (i.e., the optimal mechanism with private information) in a stylized lemons market with finite numbers of buyers and sellers. We then study the relationship between the degree of efficiency of the second-best mechanism and market competitiveness. The relationship between the first-best and second-best mechanisms is also explored.
Item Type: | Working or Discussion Paper (Working Paper) | ||||
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Subjects: | H Social Sciences > HB Economic Theory | ||||
Divisions: | Faculty of Social Sciences > Economics | ||||
Library of Congress Subject Headings (LCSH): | Information asymmetry, Competition, Imperfect, Commerce | ||||
Series Name: | Warwick economics research paper series (TWERPS) | ||||
Publisher: | University of Warwick. Dept. of Economics | ||||
Place of Publication: | Coventry | ||||
Official Date: | 2010 | ||||
Dates: |
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Volume: | Vol.2010 | ||||
Number: | No.939 | ||||
Institution: | University of Warwick | ||||
Status: | Not Peer Reviewed | ||||
Access rights to Published version: | Open Access (Creative Commons) |
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