relation: http://eprints.imtlucca.it/3873/
title: Dynamic Adverse Selection and the Supply Size
creator: Bilancini, Ennio
creator: Boncinelli, Leonardo
subject: HB Economic Theory
description: In this paper we examine the problem of dynamic adverse selection in a stylized market where the quality of goods is a seller's private information while the realized distribution of qualities is public information. We obtain that full trade occurs in every dynamic competitive equilibrium. Moreover, we show that if prices can be conditioned on the supply size then a dynamic competitive equilibrium always exists, while it fails to exist if prices cannot be conditioned on the supply size and the frequency of exchanges is high enough. We conclude that the possibility to condition prices on the supply size allows to reach efficiency in the limit for exchanges becoming more and more frequent, while otherwise the welfare loss due to delays of exchanges remains bounded away from zero.
publisher: Elsevier
date: 2016
type: Article
type: PeerReviewed
identifier:   Bilancini, Ennio and Boncinelli, Leonardo  Dynamic Adverse Selection and the Supply Size.  European Economic Review, 83.  pp. 233-242.  ISSN 0014-2921      (2016)  
relation: http://www.sciencedirect.com/science/article/pii/S0014292116300022
relation: doi: 10.1016/j.euroecorev.2016.01.002