Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/307804 
Year of Publication: 
2024
Series/Report no.: 
Helsinki GSE Discussion Papers No. 23
Publisher: 
Helsinki Graduate School of Economics, Helsinki
Abstract: 
We establish new efficiency results for decentralized markets with quality uncertainty. Buyers encounter a succession of passing trade opportunities and related asset information, allowing them to screen the quality of assets by conditioning pricing on informative signals. We link key equilibrium properties with the intensity of screening. This innovative approach delivers conditions under which efficient equilibria exist, characterizes efficient and inefficient equilibria in terms of asset screening and trade dynamics, and presents a new measure for the information required for efficient trade and asset screening. Trade dynamics may manifest as either standard or reversed.
Subjects: 
decentralized lemons market
screening
buyer signals
trade dynamics
efficient equilibrium
equilibrium existence
JEL: 
D82
D83
ISBN: 
978-952-7543-22-1
Document Type: 
Working Paper

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