This paper studies a decentralized, dynamic matching and bargaining market: buyers and sellers are matched into pairs. Traders exit the market at a constant rate, inducing search costs (frictions). All price offers are made by sellers. Despite the fact that sellers have all the bargaining power...

In this paper, we study auctions with outside options provided by future market interaction focusing on the revenue effects of some information revelation policies. We show that auctions with less information revelation may yield higher revenues. In particular, we show that it is never optimal...

This paper presents a new characterization result for competitive allocations in quasilinear economies. This result is informed by the analysis of non-cooperative dynamic search and bargaining games. Such games provide models of decentralized markets with trading frictions. A central objective...

We prove existence of steady-state equilibrium in a class of matching modelswith search frictions.

I consider bilateral trade between a seller and a buyer with private valuations. The seller makes a take-it-or-leave-it price offer. If the seller observes the buyerʼs valuation (symmetric information), bilateral trade is trivially efficient. If the seller cannot observe the valuation...

The bargaining process is a critical part of the model. Due to the information asymmetry, we cannot use the simple surplus sharing solutions that are common in the search literature. Instead, we assume that the buyer has all the bargaining power and offers a general mechanism which the seller...

We show that there exists a unique equilibrium in monotone strategies. We characterize equilibrium behavior for given levels of frictions. We show that new buyers experiment with low bids initially. Over time, the fact that the buyer is loosing provides bad news about the state of the world,...