This paper examines the efficiency properties of competitive equilibrium in an economy with adverse selection. The agents (firms and households) in this economy exchange contracts, which specify all the relevant aspects of their interaction. Markets are assumed to be complete, in the sense that...

Gains from coordination provide incentives for delay. In this paper, the extent of delay is studied in a dynamic, N-person, coordination game. There is no social gain from delay, so an equilibrium with delay is always inefficient. For fixed N, there is no coordination failure when the period...

The paper analyzes an economy with two-sided adverse selection, focusing on equilibria that satisfy a refinement based on the notion of strategic stability. In the familiar case of one-sided adverse selection, agents reveal all of their private information as long as the contract space is rich...