Sorting versus screening: Search frictions and competing mechanisms

A-Tier
Journal: Journal of Economic Theory
Year: 2010
Volume: 145
Issue: 4
Pages: 1354-1385

Score contribution per author:

2.011 = (α=2.01 / 2 authors) × 2.0x A-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

In a market where sellers compete by posting trading mechanisms, we allow for a general search technology and show that its features crucially affect the equilibrium mechanism. Price posting prevails when meetings are rival, i.e., when a meeting by one buyer reduces another buyer's meeting probability. Under price posting buyers reveal their type by sorting ex-ante. Only if the meeting technology is sufficiently non-rival, price posting is not an equilibrium. Multiple buyer types then visit the same sellers who screen ex-post through auctions.

Technical Details

RePEc Handle
repec:eee:jetheo:v:145:y:2010:i:4:p:1354-1385
Journal Field
Theory
Author Count
2
Added to Database
2026-01-25