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Inverse Adverse Selection: The Market for Gems

Dari-Mattiacci, Giuseppe; Onderstal, Sander; Parisi, … - Tinbergen Institute - 2011

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 market...

Persistent link: https://www.econbiz.de/10008838639

Auctions under Payoff Uncertainty: The Case with Heterogeneous Bidder-Aversion to Downside Risk

Hu, Audrey; Zou, Liang - Tinbergen Institute - 2008

This paper characterizes the optimal first-price auction (FPA) and second-price auction (SPA) for selling rights …

Persistent link: https://www.econbiz.de/10005136943

Emotions and Economic Shocks in a First-Price Auction

Bosman, Ronald; Riedl, Arno - Tinbergen Institute - 2003

We investigate experimentally whether emotions affect bidding behavior in a first price auction. To induce emotions, we … confront subjects after a first auction series with a positive or negative random economic shock. We then explore the relation … between emotions and bidding behavior in a second auction series. Our main results are: (i) the economic shock has a …

Persistent link: https://www.econbiz.de/10005137109

Bidding to give in the Field: Door-to-Door Fundraisers had it right from the Start

Onderstal, Sander; Schram, Arthur J.C.; Soetevent, … - Tinbergen Institute - 2011

approached about 4500 households, each participating in either an all-pay auction, a lottery, a non-anonymous voluntary … contribution mechanism (VCM), or an anonymous VCM. In contrast to the VCMs, households competed for a prize in the all-pay auction … and the lottery. Although the all-pay auction is the superior fundraising mechanism both in theory and in the laboratory …

Persistent link: https://www.econbiz.de/10009003388

Continuous Time Trading in Markets with Adverse Selection

Janssen, Maarten C.W.; Karamychev, Vladimir - Tinbergen Institute - 2000

We investigate the nature of the adverse selection problem in a market for a durable good where trading and entry of new buyers and sellers takes place in continuous time. In the continuous time model equilibria with properties that are qualitatively different from the static equilibria, emerge....

Persistent link: https://www.econbiz.de/10005144503

Tainted Food, Low-Quality Products and Trade

Viaene, Jean-Marie; Zhao, Laixun - Tinbergen Institute - 2010

This paper examines international trade in tainted food and other low-quality products. We

Persistent link: https://www.econbiz.de/10008513228

Credit Rationing Effects of Credit Value-at-Risk

Slijkerman, Jan Frederik; Smant, David J.C.; Vries, … - Tinbergen Institute - 2004

Banks provide risky loans to firms which have superior information regarding the quality of their projects. Due to asymmetric information the banks face the risk of adverse selection. Credit Value-at-Risk (CVaR) regulation counters the problem of low quality, i.e. high risk, loans and therefore...

Persistent link: https://www.econbiz.de/10005136889

Competition for a Prize

Noll, Rob van der - Tinbergen Institute - 2006

I present a model in which individuals compete for a prize by choosing to apply or not. Abilities are private information and in attempt to select the best candidate, the committee compares applicants with an imperfect technology. The choice of application cost, size of the prize and use of...

Persistent link: https://www.econbiz.de/10005136926

Pros and Cons of ‘Backing Winners’ in Innovation Policy

Butter, Frank A.G. den; Jo, Seung-gyu - Tinbergen Institute - 2009

In the economics profession there is a fierce debate whether industrial and innovation policy should be targeted to specific sectors or firms. This paper discusses the welfare effects of such targeted policies from the perspective of strategic game theory of the firm. A theoretical case for...

Persistent link: https://www.econbiz.de/10005136977

Dynamic Insurance and Adverse Selection

Janssen, Maarten C.W.; Karamychev, Vladimir A. - Tinbergen Institute - 2001

We take a dynamic perspective on insurance markets under adverse selection and study a generalized Rothschild and Stiglitz model where agents may differ with respect to the accidental probability and their expenditure levels in case an accident occurs. We investigate the nature of dynamic...

Persistent link: https://www.econbiz.de/10005136996