Attar, Andrea, Mariotti, Thomas and Salanié, François (2021) Competitive nonlinear pricing under adverse selection. TSE Working Paper, n. 21-1201, Toulouse

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This article surveys recent attempts at characterizing competitive allocations under adverse selection when each informed agent can privately trade with several uninformed parties: that is, trade is nonexclusive. We rst show that requiring market outcomes to be robust to entry selects a unique candidate allocation, which involves cross-subsidies. We then study how to implement this allocation as the equilibrium outcome of a game in which the uninformed parties, acting as principals, compete by making oers to the informed agents. We show that equilibria typically fail to exist in competitive-screening games, in which these oers are simultaneous. We nally explore alternative extensive forms, and show that the candidate allocation can be implemented through a discriminatory ascending auction. These results yield sharp predictions for competitive nonexclusive markets.

Item Type: Monograph (Working Paper)
Language: English
Date: April 2021
Place of Publication: Toulouse
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)
Institution: Université Toulouse 1 Capitole
Site: UT1
Date Deposited: 08 Apr 2021 07:53
Last Modified: 05 Sep 2022 14:24
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