We consider a frictional two-sided matching market in which one side uses public cheap talk announcements so as to attract the other side. We show that if the first-price auction is adopted as the trading protocol, then cheap talk can be perfectly informative, and the resulting market outcome is...

We consider a frictional two-sided matching market in which one side uses public cheap-talk announcements so as to attract the other side. We show that if the first-price auction is adopted as the trading protocol, then cheap talk can be perfectly informative, and the resulting market outcome is...

Directed search models are market games in which each firm announces a wage commitment to attract a worker. Miscoordination among workers generates search frictions, yet in equilibrium more productive firms post more attractive wage commitments to fill their vacancies faster, which yields...

In the wake of the 2007-2008 financial crisis, a policy called the Public-Private Investment Program for Legacy Assets (PPIP) was introduced to promote price discovery and restore liquidity in the markets for a variety of asset-backed securities. Under this program, private investors who were...

We study the effects of endogenizing search intensity in sequential search models of trading under adverse selection. Ceteris paribus, the low-type seller obtains more surplus from search and, therefore, searches more intensively than the high-type seller. This has two ramifications for trade....

a new theory.

It is well known that a monopolist selling a single good, say a painting, can extract higher rents running an auction-type mechanism rather than posting a fixed price. In competitive markets, for example selling used books on line, price posting is often more prevalent than auctions. While...