Yamashita, Takuro and Murooka, Takeshi
(2021)
A Note on Adverse Selection and Bounded Rationality.
TSE Working Paper, n. 21-1244, Toulouse
Preview |
Text
Download (317kB) | Preview |
Official URL : http://tse-fr.eu/pub/125926
Abstract
We consider an adverse selection environment between an informed seller and an uninformed buyer, where no trade occurs when all buyers are rational. The buyer may be a “behavioral” type in the sense that he may take actions different from a rational type. We show that, for any incentive-feasible mechanism with any non-trivial trade, the buyer’s ex-ante expected payoff is strictly negative. Our result implies that whenever trade occurs, some behavioral types must incur losses.
Item Type: | Monograph (Working Paper) |
---|---|
Language: | English |
Date: | September 2021 |
Place of Publication: | Toulouse |
Uncontrolled Keywords: | Adverse selection, Inferential naivety, Mechanism design, Behavioral contract theory, Consumer protection |
JEL Classification: | D82 - Asymmetric and Private Information D89 - Other D90 - General D91 - Intertemporal Consumer Choice; Life Cycle Models and Saving |
Subjects: | B- ECONOMIE ET FINANCE |
Divisions: | TSE-R (Toulouse) |
Institution: | Université Toulouse 1 Capitole |
Site: | UT1 |
Date Deposited: | 08 Sep 2021 08:45 |
Last Modified: | 08 Sep 2021 08:45 |
OAI Identifier: | oai:tse-fr.eu:125926 |
URI: | https://publications.ut-capitole.fr/id/eprint/43799 |