第36章讲义+不对称信息.pptVIP

Adverse Selection with Quality Choice Suppose every seller makes only high-quality umbrellas. Every buyer pays $14 and sellers’ profit per umbrella is $14 - $11 = $3. But then a seller can make low-quality umbrellas for which buyers still pay $14, so increasing profit to $14 - $10 = $4. Adverse Selection with Quality Choice There is no market equilibrium in which only high-quality umbrellas are traded. Is there a market equilibrium in which only low-quality umbrellas are traded? Adverse Selection with Quality Choice All sellers make only low-quality umbrellas. Buyers pay at most $8 for an umb