Public vs. Private Offers in the Market for Lemons

Nicolas Vieille (1) , Johannes Hörner (1)

1 GREGH - Groupement de Recherche et d'Etudes en Gestion à HEC

We study the role of observability in bargaining with correlated values. Short-run buyers sequentially submit offers to one seller. When previous offers are observable, bargaining is likely to end up in an impasse. In contrast, when offers are hidden, agreement is always reached, although with delay.

Mots clés: Public offer; Private offer; lemons; market

Domaines: Economie et sciences de la décision

Nicolas Vieille, Johannes Hörner. Public vs. Private Offers in the Market for Lemons. Econometrica, 2009, Vol.77,n°1, pp.29-69. ⟨hal-00464577⟩