Assortative Matching, Adverse Selection and Durable Goods: Transaction History, Safety Regulation and the Likelihood of Trade in the Business Aircraft Market

2006 ◽  
Author(s):  
Thomas W. Gilligan
Keyword(s):  
Adverse Selection ◽  
Durable Goods ◽  
Assortative Matching ◽  
Safety Regulation

Asymmetric group loans, non-assortative matching and adverse selection

2014 ◽  
Vol 124 (2) ◽  
pp. 185-187
Author(s):  
Shubhashis Gangopadhyay ◽  
Robert Lensink
Keyword(s):  
Adverse Selection ◽  
Assortative Matching

scholarly journals Adverse Selection in Durable Goods Markets

10.3386/w6194 ◽  
1997 ◽  
Author(s):  
Igal Hendel ◽  
Alessandro Lizzeri
Keyword(s):  
Adverse Selection ◽  
Durable Goods

Assortative Matching under Asymmetric Information: Evidence from Malawi

2017 ◽  
Vol 107 (5) ◽  
pp. 154-157 ◽  
Author(s):  
Manuela Angelucci ◽  
Daniel Bennett
Keyword(s):  
Asymmetric Information ◽  
Adverse Selection ◽  
Hiv Risk ◽  
Marriage Market ◽  
Partner Selection ◽  
Married Women ◽  
Assortative Matching ◽  
Marriage Timing

Asymmetric information is a key feature of the marriage market. In HIV-endemic settings, HIV risk is an important partner attribute that may influence marriage timing and partner selection. We use a sample of married women in rural Malawi to validate a model of positive assortative matching under asymmetric information. Several correlations support this framework, suggesting that HIV risk contributes to adverse selection in the marriage market in this setting.

Beautiful Lemons: Adverse Selection in Durable-Goods Markets with Sorting

2017 ◽  
Vol 63 (9) ◽  
pp. 3111-3127 ◽  
Author(s):  
Jonathan R. Peterson ◽  
Henry S. Schneider
Keyword(s):  
Adverse Selection ◽  
Durable Goods

scholarly journals Adverse Selection in the Marriage Market: HIV Testing and Marriage in Rural Malawi

2020 ◽  
Author(s):  
Manuela Angelucci ◽  
Daniel Bennett
Keyword(s):  
Asymmetric Information ◽  
Hiv Testing ◽  
Adverse Selection ◽  
Hiv Risk ◽  
High Frequency ◽  
Marriage Market ◽  
Assortative Matching ◽  
Aids Epidemic ◽  
Opt Out ◽  
Safety Attributes

Abstract Asymmetric information in the marriage market may cause adverse selection and delay marriage if partner quality is revealed over time. Sexual safety is an important but hidden partner attribute, especially in areas where HIV is endemic. A model of positive assortative matching with both observable (attractiveness) and hidden (sexual safety) attributes predicts that removing the asymmetric information about sexual safety accelerates marriage and pregnancy for safe respondents, and more so if they are also attractive. Frequent HIV testing may enable safe people to signal and screen. Consistent with these predictions, we show that a high-frequency, “opt-out” HIV testing intervention changed beliefs about partner’s safety and accelerated marriage and pregnancy, increasing the probabilities of marriage and pregnancy by 26 and 27 percent for baseline-unmarried women over 28 months. Estimates are larger for safe and attractive respondents. Conversely, a single-test intervention lacks these effects, consistent with other HIV testing evaluations in the literature. Our findings suggest that an endogenous response to HIV risk may explain why the HIV/AIDS epidemic has coincided with systematic marriage and pregnancy delays.

scholarly journals Durable Goods Theory for Real World Markets

2003 ◽  
Vol 17 (1) ◽  
pp. 131-154 ◽  
Author(s):  
Michael Waldman
Keyword(s):  
Adverse Selection ◽  
Real World ◽  
Durable Goods ◽  
Law And Economics ◽  
American Economic Review ◽  
Market Mechanism ◽  
Time Inconsistency ◽  
Quality Uncertainty ◽  
Planned Obsolescence ◽  
World Markets

The early 1970s witnessed three major advances in durable-goods theory — Swan, Peter. 1970. “Durability of Consumption Goods.” American Economic Review. December, 60:5, pp. 884–94. Swan, Peter. 1971. “The Durability of Goods and Regulation of Monopoly.” Bell Journal of Economics. Spring, 2:1, pp. 347–57. and Sieper, E. and Peter Swan. 1973. “Monopoly and Competition in the Market for Durable Goods.” Review of Economic Studies. July, 40:3, pp. 333–51. on optimal durability, Coase, Ronald. 1972. “Durability and Monopoly.” Journal of Law and Economics. April, 15:1, pp. 143–49. on time inconsistency, and Akerlof, George. 1970. “The Market for ‘Lemons’: Quality Uncertainty and the Market Mechanism.” Quarterly Journal of Economics. August, 84:3, pp. 488–500. on adverse selection. This paper surveys durable goods theory starting with these three contributions, where much of the focus is on recent literature and on models that explain real-world phenomena. In addition to the ideas found in the contributions of Swan, Coase, and Akerlof, topics covered include why producers sometimes practice “planned obsolescence,” the role of adverse selection in new-car leasing, and reasons for aftermarket monopolization.

scholarly journals Adverse Selection in Durable Goods Markets

1999 ◽  
Vol 89 (5) ◽  
pp. 1097-1115 ◽  
Author(s):  
Igal Hendel ◽  
Alessandro Lizzeri
Keyword(s):  
Dynamic Model ◽  
Adverse Selection ◽  
Durable Goods ◽  
Used Goods Markets ◽  
Used Goods ◽  
Volume Of Trade

We present a dynamic model of adverse selection to examine the interactions between new and used goods markets. We find that the used market never shuts down, the volume of trade can be large, and distortions are lower than previously thought. New cars prices can be higher under adverse selection than in its absence. An extension to several brands that differ in reliability leads to testable predictions of the effects of adverse selection. Unreliable brands have steeper price declines and lower volumes of trade. We contrast these predictions with those of a model where brands physically depreciate at different rates. (JEL D82, L15)

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