Adverse selection induces economic limits to market substitution. If quality uncertainty persists in both internet and traditional marketplaces, a second-best equilibrium with parallel market segments may arise. Positive trade in parallel segments implies that the information cost advantage of...

Adverse selection induces economic limits to market substitution. If quality uncertainty persists in both internet and traditional marketplaces, a second-best equilibrium with parallel market segments may arise. Positive trade in parallel segments implies that the information cost advantage of...

Adverse selection induces economic limits to market substitution. If quality uncertainty persists in both Internet and traditional marketplaces, a second-best equilibrium with parallel market segments may arise. The information cost advantage of one marketplace is exactly offset by a more severe...