Azevedo, Eduardo M. and Gottlieb, Daniel (2019) An example of non-existence of Riley equilibrium in markets with adverse selection. Games and Economic Behavior. ISSN 0899-8256 (In Press)
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Text (An Example of Non-Existence of Riley Equilibrium in Markets with Adverse Selection)
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Abstract
Rothschild and Stiglitz [1976] proposed a model of a competitive market with adverse selection and showed that a (pure strategy) Nash equilibrium may not exist. Among the solutions proposed to deal with this problem, a particularly influential one is the notion of Riley (or reactive) equilibrium [Riley, 1979]. We give an example that shows that a Riley equilibrium may not exist if consumers are not ordered.
Item Type: | Article |
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Official URL: | https://www.sciencedirect.com/journal/games-and-ec... |
Divisions: | Management |
Date Deposited: | 18 Nov 2019 17:30 |
Last Modified: | 08 Dec 2019 00:32 |
URI: | http://eprints.lse.ac.uk/id/eprint/102566 |
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