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A Peer-reviewed scientific articles/A1 Journal article (refereed), original research
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Adverse Selection in Dynamic Matching Markets, Bulletin of Economic Research (2015). Klaus Kultti, Eva Mauring, Juuso Vanhala, Timo Vesala

Category A Peer-reviewed scientific articles
Sub-category A1 Journal article (refereed), original research
auki Internal authors
All authors as text Klaus Kultti, Eva Mauring, Juuso Vanhala, Timo Vesala 
Number of authors
Status Published
Year of publication 2015 
Date 08.04.2015 
Name of article Adverse Selection in Dynamic Matching Markets 
Name of journal Bulletin of Economic Research
Abstract We study the Akerlofian adverse selection problem in a dynamic matching model where the competitive situation varies across different meetings. The ‘lemons principle’ is shown to limit the high quality sales within a wider range of quality distributions than in the Walrasian benchmark. High quality goods can nevertheless be traded, albeit less frequently than the low quality goods. For certain quality distributions, there exists a ‘partially pooling’ steady state where high quality sellers are active whenever at least two buyers compete for the good. Otherwise, the model features cycles in a sense that high quality goods are traded only in non-consecutive periods.
ISSN / e-ISSN 0307-3378 

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