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Handbook of the Economics of Risk and Uncertainty
book

Handbook of the Economics of Risk and Uncertainty

by Mark Machina, W. Kip Viscusi
November 2013
Beginner content levelBeginner
896 pages
35h 10m
English
North Holland
Content preview from Handbook of the Economics of Risk and Uncertainty
Uncertainty and Imperfect Information in Markets
359
6.5.5 Selfish Buyer Actions
We now turn to wholly selfish actions by the buyer. As a somewhat general framework
suppose that the timing of the game between buyer and seller is the following:
• Buyersinksaninvestment
I
R
+
. This affects his benefit,
b
R
+
, should he obtain
a unit of some good, asset, or service from the seller. The buyer is assumed to want
at most one unit.
• Thesellerobservesasignal,s, that may contain information about b.
• ThesellermakesaTIOLI offertoselloneunitatpricep.
• Afterobservingb and s, the buyer decides whether to buy or not.
The payoffs to buy ...
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Publisher Resources

ISBN: 9780444536853