Transparency and Distressed Sales under Asymmetric Information

Aniko Oery, Andrzej Skrzypacz and William Fuchs
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Aniko Oery: Yale
Authors registered in the RePEc Author Service: Aniko Öry

No 73, 2015 Meeting Papers from Society for Economic Dynamics

Abstract: We analyze price transparency in a dynamic market with private information and correlated values. Uninformed buyers compete inter- and intra-temporarily for a good that is sold by an informed seller suffering a liquidity shock. We contrast public versus private price offers and show that equilibria coincide only if offers are infrequent. All equilibria with private offers Pareto-dominate the equilibrium with public offers. If not trading by a deadline imposes an efficiency loss, public offers induce a market breakdown for some time before the deadline; in contrast, trade never stops with private offers, creating a further benefit of opacity.

Date: 2015
New Economics Papers: this item is included in nep-com, nep-mic and nep-mst
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Citations: View citations in EconPapers (9)

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Related works:
Journal Article: Transparency and distressed sales under asymmetric information (2016)
Working Paper: Transparency and Distressed Sales under Asymmetric Information (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:red:sed015:73

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