Monday, March 31, 2014
James Albrecht (Georgetown University), Pieter Gautier (Free University of Amsterdam - VU) and Susan Vroman (Georgetown University) address Efficient Entry in Competitive Search with Nonrival Meetings and Asymmetric Information.
ABSTRACT: In this paper, we consider the efficiency of entry in a model of compet- itive search. By competitive searchwe mean that we analyze a large market in which buyers (or sellers) can direct their search based on the terms of trade that are posted (with commitment) by their counter- parts on the other side of the market. We consider in particular entry on the side of the market on which the terms of trade are advertised. We generalize this literature on efficiency entry on competitive search in two directions. First, we allow for many-on-one meetings; e.g., a seller may interact with two or more buyers at the same time. Second, we allow for asymmetric information; e.g., a seller may not know how much the buyers she is interacting with value her good.