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Durables and Lemons : Private Information and the Market for Cars

Blundell, Richard W. - 2020

, income and wealth. The transaction cost, which we term the lemons penalty, is estimated to be 18% of the price in the first … probability of downgrading in the event of an adverse income shock. The size of the lemons penalty declines when uncertainty in … the economy increases, as in recessions: large income shocks induce individuals to sell their cars, even if of good …

Persistent link: https://www.econbiz.de/10012836124

Durables and Lemons : Private Information and the Market for Cars

Blundell, Richard W. - 2020

, income and wealth. The transaction cost, which we term the lemons penalty, is estimated to be 18% of the price in the ﬁrst … probability of downgrading in the event of an adverse income shock. The size of the lemons penalty declines when uncertainty in … the economy increases, as in recessions: large income shocks induce individuals to sell their cars, even if of good …

Persistent link: https://www.econbiz.de/10012823587

Durables and Lemons : Private Information and the Market for Cars

Blundell, Richard - 2019

We specify an equilibrium model of car ownership with private information where individuals sell and purchase new and second-hand cars over their life-cycle. Private information induces a transaction cost and distorts the market reducing the value of a car as a savings instrument. We estimate...

Persistent link: https://www.econbiz.de/10012480225