| Strausz, Roland (June 2010): Separating Equilibria with Imperfect Certification. SFB/TR 15 Discussion Paper No. 324 |
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185Kb |
Abstract
Viscusi (1978) shows how, in markets with quality uncertainty, perfect certification results in separation from top down due to an unraveling process similar to Akerlof (1970). De and Nabar (1991) argue that imperfect certification prevents unraveling so that equilibria with full separation do not exist. This note shows that, if one considers the buyers' buying decision explicitly, a separating equilibrium with imperfect certification does exist.
| Item Type: | Paper (Discussion Paper) |
|---|---|
| Keywords: | certification, unraveling, separating equilibrium |
| Collections: | Special Research Fields > Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems Special Research Fields > Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems > A1 - Allokationsmechanismen in Organisationen und Märkten |
| Subjects: | 300 Social sciences > 330 Economics |
| JEL Classification: | D82, L15 |
| URN: | urn:nbn:de:bvb:19-epub-13230-7 |
| Language: | English |
| ID Code: | 13230 |
| Last Modified: | 10. Jul 2012 13:07 |
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