Miracle on Sixth Avenue: Information externalities and search

Andrew Caplin, John Leahy

    Research output: Contribution to journalArticle

    Abstract

    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 market structure and changes in search technology. The model is suggestive of difficulties that may occur in many markets in which there are changes over time in the optimal use of resources.

    Original languageEnglish (US)
    Pages (from-to)60-74
    Number of pages15
    JournalEconomic Journal
    Volume108
    Issue number446
    DOIs
    StatePublished - Jan 1998

    ASJC Scopus subject areas

    • Economics and Econometrics

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