Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
7348548 | Economics Letters | 2018 | 5 Pages |
Abstract
Time-on-market is often interpreted as a negative signal of an asset's quality. The lengthier the time-on-market, the greater the probability that past buyers arrived, observed some undesirable quality, and chose not to buy. In this paper, I propose a simple model of quality, price, and time-on-market. The model yields closed-form expressions for beliefs, prices, and rates of sale. To demonstrate the accessibility of the model, I work out simple comparative statics for time-on-market and sale price and extend the model by giving the seller a valuable outside option.
Keywords
Related Topics
Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
Jordan Martel,