Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/93987
Authors: 
Strausz, Roland
Year of Publication: 
2010
Series/Report no.: 
SFB/TR 15 Discussion Paper 324
Abstract: 
Viscusi (1978) shows how, in markets with quality uncertainty, perfect certification results in separation from top down due to an unraveling process similar to Akerlof (1970). De and Nabar (1991) argue that imperfect certification prevents unraveling so that equilibria with full separation do not exist. This note shows that, if one considers the buyers' buying decision explicitly, a separating equilibrium with imperfect certification does exist.
Subjects: 
certification
unraveling
separating equilibrium
JEL: 
D82
L15
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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