Eeckhout, Jan and Kircher, Philipp (2010) Sorting versus screening: search frictions and competing mechanisms. Journal of economic theory, 145 (4). pp. 1354-1385. ISSN 1095-7235
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Abstract
In a market where sellers compete by posting trading mechanisms, we allow for a general search technology and show that its features crucially affect the equilibrium mechanism. Price posting prevails when meetings are rival, i.e., when a meeting by one buyer reduces another buyer's meeting probability. Under price posting buyers reveal their type by sorting ex-ante. Only if the meeting technology is sufficiently non-rival, price posting is not an equilibrium. Multiple buyer types then visit the same sellers who screen ex-post through auctions.
| Item Type: | Article |
|---|---|
| Official URL: | http://www.elsevier.com/wps/find/journaldescriptio... |
| Additional Information: | © 2010 Elsevier Inc. |
| Uncontrolled Keywords: | Competing mechanism design, Matching function, Meeting function, Sorting, Screening, Price posting, Auctions |
| Library of Congress subject classification: | H Social Sciences > HB Economic Theory |
| Journal of Economic Literature Classification System: | C - Mathematical and Quantitative Methods > C7 - Game Theory and Bargaining Theory > C78 - Bargaining Theory; Matching Theory D - Microeconomics > D4 - Market Structure and Pricing > D44 - Auctions D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D82 - Asymmetric and Private Information |
| Sets: | Departments > Economics Collections > Economists Online |
| Rights: | http://www.lse.ac.uk/library/rights/LSERO.htm |
| URL: | http://eprints.lse.ac.uk/29704/ |
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