Investing to access an adverse selection market

Sander Heinsalu

    Research output: Contribution to journalArticlepeer-review

    2 Citations (Scopus)


    I analyse a market with asymmetric information and interdependent values. Accessing the market is costly and stochastic, e.g. requires lobbying, licences or R&D. For a range of parameter values, interventions that raise production or entry costs for all seller types increase trade, investment and payoff for all types. This effect is driven by a novel feedback loop between the market composition and the investment in access.

    Original languageEnglish
    Article number102660
    JournalInternational Journal of Industrial Organization
    Publication statusPublished - Sept 2020


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