Optimal Trade Mechanisms with Adverse Selection and Inferential Mistakes

Material type: 文書・図像類

Author: Murooka, Takeshiほか

Publisher: Osaka School of International Public Policy, Osaka University

Publication date: 2021-09

Material Format: Paper

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Note (General)：: We study an adverse selection environment, where a rational seller can trade a good of which she privately knows its value to a buyer, and there are g...

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Paper

Material Type: 文書・図像類
Title: Optimal Trade Mechanisms with Adverse Selection and Inferential Mistakes
Author/Editor: Murooka, Takeshi
Yamashita, Takuro
Author Heading: Murooka, Takeshi
https://nrid.nii.ac.jp/nrid/1000010796345
Yamashita, Takuro
Publication, Distribution, etc.: Osaka School of International Public Policy, Osaka University
Publication Date: 2021-09
Publication Date (W3CDTF): 2021-09
Periodical title: OSIPP Discussion Paper
No. or year of volume/issue: DP-2021-E-006
Volume: DP-2021-E-006
Pages: 1-38
Text Language Code: eng
Subject Heading: adverse selection
inferential naivety
mechanism design
behavioral contract theory
consumer protection
Target Audience: 一般
Note (General): We study an adverse selection environment, where a rational seller can trade a good of which she privately knows its value to a buyer, and there are gains from trade. The buyer's types differ in their degree of inferential abilities: A rational type correctly infers the value of the good from the seller's offer, whereas a naive type under-appreciates the correlation between the seller's private information and offer. We characterize the optimal menu mechanism that maximizes the social surplus. Notably, no matter how severe the adverse selection is (in particular, even when no trade is the unique possible outcome if all agents are rational), all types of buyers trade in the optimal mechanism. The rational buyer's trade occurs at the expense of the naive buyer's losses. We also investigate a consumer-protection policy of limiting the losses and discuss its implications.
References (URI): http://www.osipp.osaka-u.ac.jp/archives/DP/2021/DP2021E006.pdf
URI
http://www.osipp.osaka-u.ac.jp/archives/DP/2021/DP2021E006.pdf
Data Provider (Database): 国立情報学研究所 : 学術機関リポジトリデータベース（IRDB）（機関リポジトリ）
https://irdb.nii.ac.jp
Original Data Provider (Database): 大阪大学 : 大阪大学学術情報庫　桜華