Miracle on Sixth Avenue: Information Externalities and Search

Miracle on Sixth Avenue: Information Externalities and Search

After a long dormant period, Lower Sixth Avenue in New York has undergone a rapid revitalisation. We show that a simple search theoretic model with information spillovers can explain both the period of underuse and the rapid turnaround. The model reduces to a simple equation, which allows us to do comparative statics on the duration of vacancies. We show how the solution reacts to changes in ma...

Information Externalities and Intermediaries in Frictional Search Markets Information Externalities and Intermediaries in Frictional Search Markets *

In frictional matching markets with heterogeneous buyers and sellers, sellers incur discrete showing costs to show goods to buyers who incur discrete inspection costs to assess the suitability of the goods on offer. This paper studies how brokers can help reduce these costs by managing the level and mix of goods in their inventory. We find that intermediaries emerge and improve social welfare w...

Externalities and Asymmetric Information*

A reconsideration of the Pigovian theory of regulating externalities via taxation is undertaken for environments with private information. The presence of private information may have no effect on the social optimum; but when it has an impact, it is to cause a group of different agents to share the same production or consumption levels. The model developed provides an appealing characterization...

Information And Communication Technology Externalities And Economic Growth In Newly Industrialized Countries

Externalities among Advertisers in Sponsored Search

We introduce a novel computational model for single-keyword auctions in sponsored search, which explicitly models externality effects among the advertisers, an aspect that has not been (fully) reflected in the existing models, and is known to be prevalent in the behavior of real advertisers. Our model takes into account both positive and negative correlations between any pair of advertisers, an...