In the traditional formulation of rent-seeking games, increasing returns to effort are characterized by an exponent r 1. However,when the value of rent is normalized to 1, the players’ effort levels A and B will typically be less than 1. Thus, when A < 1 and r > 1, the value of Ar decreases as r...</1>

This paper studies markets plagued with asymmetric information on the quality of traded goods. In Akerlof’s setting, sellers are better in- formed than buyers. In contrast, we examine cases where buyers are better informed than sellers. This creates an inverse adverse selection problem: the...

In Akerlof's 1970 Market for Lemons, asymmetric information arises because sellers are better informed than buyers. A seller’s informational advantage creates an adverse selection problem. When buyers are better informed than sellers, a mirror-image problem arises. Although both asymmetric...

This paper studies markets plagued with asymmetric information on the quality of traded goods. In Akerlof’s setting, sellers are better informed than buyers. In contrast, we examine cases where buyers are better informed than sellers. This creates an inverse adverse selection problem: the...