A Scent of Lemon—Seller Meets Buyer with a Noisy Quality Observation
We consider a market for lemons in which the seller is a monopolistic price setter and the buyer receives a private noisy signal of the product’s quality. We model this as a game and analyze perfect Bayesian equilibrium prices, trading probabilities and gains of trade. In particular, we vary the buy...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
| Published: |
MDPI AG
2011-03-01
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| Series: | Games |
| Subjects: | |
| Online Access: | http://www.mdpi.com/2073-4336/2/1/163/ |