Lemons and Peaches: A (Robust) Multi-stage Buying Mechanism with Multiple Applications
Metadata only
Date
2019-10Type
- Working Paper
ETH Bibliography
yes
Altmetrics
Abstract
We introduce a four-stage, multi-price buying mechanism, which can be used by a (big) buyer to separate low-quality sellers - called "lemon" owners - from high-quality sellers - called "peach" owners. With a partition of sellers, the buyer obtains the commodities from the "peach" owners at a price that matches the willingness to sell. By contrast, "lemon" owners are trapped into selling their items at a low, or even negligible, price. Our mechanism is robust for several extensions of our baseline setup, offers applications for market makers and regulators, and may be used by interest groups in politics. Show more
Publication status
publishedJournal / series
CEPR Discussion PapersPages / Article No.
Publisher
Centre for Economic Policy ResearchSubject
Lemons market; Partition; Signaling; Commitment; Decoy ballotsOrganisational unit
03729 - Gersbach, Hans / Gersbach, Hans
More
Show all metadata
ETH Bibliography
yes
Altmetrics