In the Akerlof model, suppose that the price of used cars is P and the quality of used cars (X) held by sellers varies between 0 and 100. Suppose further that sellers’ utility is given by where M is...

In the Akerlof model, suppose that the price of used cars is P and the quality of used cars (X) held by sellers varies between 0 and 100. Suppose further that sellers’ utility is given by

where M is the number of units of video games, which sell at $1 per game, and a is a utility function parameter that is strictly less than one (a <>

May 18, 2022

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In the Akerlof model, suppose that the price of used cars is P and the quality of used cars (X) held by sellers varies between 0 and 100. Suppose further that sellers’ utility is given by where M is...

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