Trade opportunities are generally seen as valuable instruments to improve the allocation of resources in society. However, when the traded rights are secured through unproductive rent-seeking contests, the tradeability of the rents may provide stronger incentives to invest in rent-seeking...

This paper studies markets plagued with asymmetric information on the quality of traded goods. In Akerlof’s setting, sellers are better in- formed than buyers. In contrast, we examine cases where buyers are better informed than sellers. This creates an inverse adverse selection problem: the...

In Akerlof's 1970 Market for Lemons, asymmetric information arises because sellers are better informed than buyers. A seller’s informational advantage creates an adverse selection problem. When buyers are better informed than sellers, a mirror-image problem arises. Although both asymmetric...

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...