How Naiveté improves efficiency in trading with preplay communication

Rene Saran

Economics Letters, 2012, vol. 117, issue 1, 311-314

Abstract: If a positive proportion of traders are naive (i.e., honestly reveal their types and bid/ask truthfully), then efficiency increases in a double auction with preplay communication. Presence of naive traders induces strategic traders to decrease the misrepresentation of their private information.

Keywords: Double auction; Preplay communication; Naive traders; Efficiency (search for similar items in EconPapers)
JEL-codes: C78 D82 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:117:y:2012:i:1:p:311-314

DOI: 10.1016/j.econlet.2012.05.031

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