Endogenous market segmentation for lemons
提出一种新机制，说明在逆向选择下的分散市场中，低质量卖家为吸引买家而主动与高质量卖家分离，导致市场内生分割，从而改善社会福利。
Information asymmetry between sellers and buyers often prevents socially desirable trade. This article presents a new mechanism that mitigates the inefficiencies caused by information asymmetry. I consider decentralized markets under adverse selection and show that such markets can be endogenously segmented in a way that improves social welfare. Endogenous segmentation is driven by low‐quality sellers’ incentive to attract more buyers by separating from high‐quality sellers. The mechanism helps us understand the roles of several real‐world institutions, such as multiple marketplaces, costless advertisements, and nonbinding list prices.