Trade with Heterogeneous Prior Beliefs and Asymmetric Information

Stephen Morris

Econometrica, 1994, vol. 62, issue 6, 1327-47

Abstract: 'No trade' theorems have shown that new information will not lead to trade when agents share the same prior beliefs. This paper explores the structure of no trade theorems with heterogeneous prior beliefs. It is shown how different notions of efficiency under asymmetric information--ex ante, interim, ex post--are related to agents' prior beliefs as well as incentive compatible and public versions of those efficiency concepts. These efficiency results are used to characterize necessary and sufficient conditions on agents' beliefs for no trade theorems in different trading environments. Copyright 1994 by The Econometric Society.

Date: 1994
References: Add references at CitEc
Citations: View citations in EconPapers (170)

Downloads: (external link)
http://links.jstor.org/sici?sici=0012-9682%2819941 ... O%3B2-Y&origin=repec full text (application/pdf)
Access to full text is restricted to JSTOR subscribers. See http://www.jstor.org for details.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ecm:emetrp:v:62:y:1994:i:6:p:1327-47

Ordering information: This journal article can be ordered from
https://www.economet ... ordering-back-issues

Access Statistics for this article

Econometrica is currently edited by Guido Imbens

More articles in Econometrica from Econometric Society Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery ().