Schmitz, Patrick W. ORCID: 0000-0003-3461-5102 (2021). Contracting under adverse selection: Certifiable vs. uncertifiable information. J. Econ. Behav. Organ., 182. S. 100 - 113. AMSTERDAM: ELSEVIER. ISSN 1879-1751

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Abstract

The analysis of adverse selection problems in seller-buyer relationships has typically been based on the assumption that private information is uncertifiable, while in practice it may well be certifiable. If a buyer has certifiable private information, he can conceal evidence, but he cannot claim to have information for which he has no evidence, so he has fewer possibilities to misrepresent his information. Nevertheless, we find that the expected total surplus can be strictly smaller in the case of certifiable information than in the case of uncertifiable information. This finding holds when the buyer may have private information with some exogenous probability as well as in the case of opportunistic information gathering, where the buyer can privately decide whether or not to acquire information for strategic reasons. (c) 2020 The Author(s). Published by Elsevier B.V. This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/)

Item Type: Journal Article
Creators:
CreatorsEmailORCIDORCID Put Code
Schmitz, Patrick W.UNSPECIFIEDorcid.org/0000-0003-3461-5102UNSPECIFIED
URN: urn:nbn:de:hbz:38-570824
DOI: 10.1016/j.jebo.2020.11.038
Journal or Publication Title: J. Econ. Behav. Organ.
Volume: 182
Page Range: S. 100 - 113
Date: 2021
Publisher: ELSEVIER
Place of Publication: AMSTERDAM
ISSN: 1879-1751
Language: English
Faculty: Unspecified
Divisions: Unspecified
Subjects: no entry
Uncontrolled Keywords:
KeywordsLanguage
PROPERTY-RIGHTS; COSTS; ACQUISITION; BENEFITS; FIRMMultiple languages
EconomicsMultiple languages
URI: http://kups.ub.uni-koeln.de/id/eprint/57082

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