Asymmetric information in bilateral trade and in markets: An inversion result

Lauermann, Stephan

doi:10.1016/j.jet.2012.05.021

Cited by 19 publications

(10 citation statements)

References 28 publications

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“…Ostrovsky and Schwarz (2010) studies information disclosure in a static matching market and shows that equilibrium information policies provide no incentives for early contracting unraveling. Lauermann (2012) highlights the cream-skimming behavior in search markets and the resulting inefficiencies caused by information provision, which is also the focus of our paper. 2 Our work differs from the theory of centralized matching because the market participants must inspect potential matches to identify the valuable ones.…”

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confidence: 87%

Cream Skimming and Information Design in Matching Markets

Romanyuk

Smolin

2019

American Economic Journal: Microeconomics

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Short-lived buyers arrive to a platform over time and randomly match with sellers. The sellers stay at the platform and decide whether to accept incoming requests. The platform designs what buyer information the sellers observe before deciding to form a match. We show full information disclosure leads to a market failure because of excessive rejections by the sellers. If sellers are homogeneous, then coarse information policies are able to restore efficiency. If sellers are heterogeneous, then simple censorship policies are often constrained efficient as shown by a method of calculus of variations. (JEL C78, D82, D83)

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confidence: 87%

Cream Skimming and Information Design in Matching Markets

Romanyuk

Smolin

2019

American Economic Journal: Microeconomics

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“…(Expected) welfare is equal to a young buyer's expected utility of participating in the market, which is a standard efficiency measure in this literature (Lauermann, ). In the , I show formally for each regime that if buyers discount future payoffs, i.e.…”

Section: The Modelmentioning

confidence: 99%

“…The rejection by b delays the realisation of surplus, creating an inefficiency. In Lauermann (), a similar reason causes the symmetric information benchmark to be inefficient.…”

Section: Benchmarks: the Known‐state Regime And The No‐signals’ Regimementioning

confidence: 99%

Learning from Trades

Mauring

2017

The Economic Journal

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I study stationary cut-off-strategy equilibria of a dynamic market model where buyers sample sellers sequentially from an unknown distribution. Buyers learn about the distribution from the sampled sellers and a 'trade signal'. The trade signal reveals whether a randomly chosen seller traded yesterday. Observing a trade (as opposed to no trade) is good news about the distribution. Buyers who observe a trade use a higher cut-off than buyers who observe no trade, despite buyers' learning from sampled sellers that puts a countervailing pressure on the cut-offs. The trade signal may reduce market efficiency, while an appropriate exogenous signal increases efficiency.

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“…), in which information is incomplete. A typical phenomenon is under asymmetric information [15], where, between two communicating peers, one possesses private information while the other is not aware of that. Unfortunately, rational exchange protocol under asymmetric 2 Wireless Communications and Mobile Computing information is not well considered so far and should be investigated thoroughly.…”

Section: Introductionmentioning

confidence: 99%

A Rational Exchange Protocol under Asymmetric Information in Wireless Sensor Networks

Peng

et al. 2018

Wireless Communications and Mobile Computing

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P2P network is one of the most extensive network frameworks for wireless sensor network (WSN) in Internet of Things (IoT). The peers in WSN are rational and often free ride to save power of electricity and calculation, due to the fact that the usability is of great variability and unpredictability. Such a phenomenon tremendously reduces the quality of service (QoS) in WSN. Rational exchange protocol aims at promoting QoS and guaranteeing security and fairness. However, existing schemes have taken only complete information into account, which is not up to realistic environment. The peers in realistic environment indeed possess incomplete information, which is, however, still not thoroughly investigated so far. In this paper, under asymmetric information (a typical incomplete information), an entropy based incentive model is well designed based on Markov model and QoS evaluation model to help peers cooperate in WSNs. A concrete utility function with entropy is constructed to evaluate decision utility in P2P network. Finally, an entropy based rational exchange protocol is proposed based on the presented incentive model and concrete utility function, with analysis of correctness, security, fairness, and robustness, respectively. The proposed protocol can facilitate rational peers positively and sensibly participating in services and prevent free riding for rational peers. Hence, it further promotes QoS and guarantees security and fairness simultaneously in WSNs.

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Asymmetric information in bilateral trade and in markets: An inversion result

Cited by 19 publications

References 28 publications

Cream Skimming and Information Design in Matching Markets

Cream Skimming and Information Design in Matching Markets

Learning from Trades

A Rational Exchange Protocol under Asymmetric Information in Wireless Sensor Networks

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