Attar, Andrea, Mariotti, Thomas and Salanié, François (2021) Entry-proofness and discriminatory pricing under adverse selection. American Economic Review, vol. 111 (n° 8). pp. 2623-2659.

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Identification Number : 10.1257/aer.20190189


This paper studies competitive allocations under adverse selection. We rst provide a general necessary and sucient condition for entry on an inactive market to be unprotable. We then use this result to characterize, for an active market, a unique budget-balanced allocation implemented by a market tari making additional trades with an entrant unprotable. Motivated by the recursive structure of this allocation, we nally show that it emerges as the essentially unique equilibrium outcome of a discriminatory ascending auction. These results yield sharp predictions for competitive nonexclusive markets.

Item Type: Article
Language: English
Date: August 2021
Refereed: Yes
Place of Publication: Cambridge, Mass.
Uncontrolled Keywords: Adverse Selection, Entry-Proofness, Discriminatory Pricing, Nonexclusive, Markets, Ascending Auctions.
JEL Classification: D43 - Oligopoly and Other Forms of Market Imperfection
D82 - Asymmetric and Private Information
D86 - Economics of Contract - Theory
Divisions: TSE-R (Toulouse)
Site: UT1
Date Deposited: 23 Sep 2021 14:50
Last Modified: 10 Feb 2022 14:55
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