Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/85477
Authors: 
Janssen, Maarten C.W.
Karamychev, Vladimir
Year of Publication: 
2000
Series/Report no.: 
Tinbergen Institute Discussion Paper 00-025/1
Abstract: 
We investigate the nature of market failure in a dynamic version ofAkerlof (1970) where identicalcohorts of a durable good enter the market over time. In the dynamicmodel, equilibria withqualitatively different properties emerge. Typically, in equilibriaof the dynamic model, sellerswith higher quality wait in order to sell and wait more than sellersof lower quality. Our main resultis that for any distribution of quality that there exist an infinitenumber of cyclical equilibria whereall goods are traded within a certain number of periods afterentering the market.
Subjects: 
Dynamic Trading
Asymmetric Information
Entry
Durable Goods
JEL: 
D82
Document Type: 
Working Paper

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