When consumers do not know the prices at which different firms sell, they often also do not know production costs. Consumer search models which take asymmetric information about production costs into account continue focusing on reservation price equilibria (RPE) and their properties. We argue...

The competitive market is informationally efficient; people only need to know prices to implement a competitive outcome. However, the standard formulation of competition neglects any underlying market microstructure; prices—which provide all necessary information—are exogenous. This paper...

A model of over-the-counter markets is proposed. Some asset buyers are informed in that they can identify high-quality assets. Heterogeneous sellers with private information choose what type of buyers they want to trade with. When the measure of informed buyers is low, there exists a unique and...

A monopolistic information provider sells an informative experiment to a large number of perfectly competitive firms. Within each firm, a principal contracts with an exclusive agent who is privately informed about his production cost. Principals decide whether to acquire the experiment, that is...

We study a two-period perfectly competitive industry where firms are run by agents privately informed about their (persistent) costs, and principals can only use spot contracts. The interplay between payoff externalities and spot contracting has novel implications for industry dynamics. With...

This study investigates experimentally the disclosure of verifiable information in settings with and without seller competition. Sellers often choose to report a selected set of information and buyers account for this – even though not fully – by bidding skeptically. As expected, competition...

A model of over-the-counter markets is proposed. Some asset buyers are informed in that they can identify high-quality assets. Heterogeneous sellers with private information choose what type of buyers they want to trade with. When the measure of informed buyers is low, there exists a unique...

This paper tests the predictions of adverse selection models using data from the automobile insurance market. I find that, in contrast to what recent research has suggested, the evidence is consistent with the presence of informational asymmetries in this market: new customers choosing higher...

In this paper, we present a simple model of information provision in competitive markets. We depart from previous literature in that we allow firms to choose both prices and information revelation policies. Under the assumption that the underlying state is binary, we show that in the unique...

We incorporate a search-theoretic model of imperfect competition into a standard model of asymmetric information with unrestricted contracts. We characterize the unique equilibrium, and use our characterization to explore the interaction between adverse selection, screening, and imperfect...