Annual miles drive used car prices

Engers, Maxim; Hartmann, Monica; Stern, Steven

doi:10.1002/jae.1034

Cited by 26 publications

(18 citation statements)

References 23 publications

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“…Note that the 2 Ji 1 distribution in equation (11) followed from the assumption of normality in equation (10). However, even if the normality assumption is incorrect,…”

Section: Alternative Interpretations Of Resultsmentioning

confidence: 99%

“…It is assumed that U a 0, U t 0, and 0 U e 1, U ee < 0, and U is nonnegative and bounded. 6 The …rst two assumptions follow if automobile maintenance costs increase with age (see Engers, Hartmann, and Stern, 2004) and automobile bene…ts decrease with age (see Engers, Hartmann, and Stern, 2007). The assumption that 0 U e 1 is innocuous, simply de…ning units of e and specifying e as a "good."…”

Section: Modelmentioning

confidence: 99%

“…9 The last term assumes that the owner purchases another car and immediately observes e. 10 In particular, she purchases a car that maximizes expected value given the conditional distribution of e 0 , F e (e 0 j b 0 ; v 0 ; a 0 ). Because we assume that e is unobservable to potential buyers, it does not a¤ect price.…”

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confidence: 99%

See 2 more Smart Citations

Are lemons really hot potatoes?

Engers¹,

Hartmann²,

Stern³

2009

International Journal of Industrial Organization

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“…Note that the 2 Ji 1 distribution in equation (11) followed from the assumption of normality in equation (10). However, even if the normality assumption is incorrect,…”

Section: Alternative Interpretations Of Resultsmentioning

confidence: 99%

Section: Modelmentioning

confidence: 99%

See 1 more Smart Citation

Are lemons really hot potatoes?

Engers¹,

Hartmann²,

Stern³

2009

International Journal of Industrial Organization

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“…(), Matzkin (), Mukarjee and Stern (), Stern (), and Engers et al. (). Each of these failed because they did not impose enough structure on V to ensure that it behaved well.…”

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confidence: 99%

Marriage, Divorce, and Asymmetric Information

Friedberg

Stern

2014

International Economic Review

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Abstract. In answers to unique questions from the National Survey of Families and Households, people reveal their valuations of their options outside of marriage as well as their beliefs about their spouses'options. We use this data to demonstrate several features of household bargaining. First, we document marriages in which one spouse would be happier outside the marriage and the other spouse would be unhappier. This provides a new type of evidence that bargaining takes place. Second, we show that spouses have private information about their outside options, and we estimate a bargaining model that quanti…es the extent of resulting ine¢ ciencies. Third, we incorporate caring preferences and imperfect substitutability of utility into the estimation. Without these features, estimation predicts unrealistically high divorce rates, arising because spouses drive too hard a bargain in the presence of asymmetric information and linear utility. After allowing for interdependent and diminishing marginal utility from marital surplus, both of which are identi…ed by incorporating divorce data, our divorce predictions are reasonable. These results show that agents forego their own utility in order to raise the utility of their spouses, and, in doing so, o¤set much of the ine¢ ciency generated by their imperfect knowledge. In contrast, a social planner with only public information about spouses'outside options reduces welfare considerably by keeping far too many couples together. In sum, we …nd evidence about two key features of marriage -asymmetric information and interdependent utility -which are di¢ cult to identify in most studies of interpersonal relationships.We would like to thank

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“…Future work could address the connection between the approach adopted here and a small literature that takes an asset market approach to the study of the car market (Kahn ( 1986), Engers et al (2009)). The idea is that the car is an investment good whose value is determined by that of the future services (car miles driven) to be derived from it.…”

Section: Resultsmentioning

confidence: 99%