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Information Revelation in a Market with Pairwise Meetings

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Author Info
Wolinsky, Asher
Abstract

A model of a market with pairwise meetings is developed in which traders have asymmetric information about the true state of the world. The focus is on information transmission. The main questions concern the extent to which the information is revealed to uninformed agents through the trade process and, in particular, whether nearly frictionless versions of this market give rise to full revelation results, as obtained by the literature on rational expectations for centralized and competitive markets. It turns out that, in equilibrium, the information is not fully revealed to uninformed agents, even when the market is approximately frictionless. Copyright 1990 by The Econometric Society.

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Publisher Info
Article provided by Econometric Society in its journal Econometrica.

Volume (Year): 58 (1990)
Issue (Month): 1 (January)
Pages: 1-23
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Handle: RePEc:ecm:emetrp:v:58:y:1990:i:1:p:1-23

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  1. BOCHET, Olivier, 2005. "Switching from complete to incomplete information," CORE Discussion Papers 2005063, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE). [Downloadable!]
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  2. Richard K. Lyons, 1993. "Optimal Transparency in a Dealership Market with an Application to Foreign Exchange," NBER Working Papers 4467, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  3. Sanjeev Goyal, 1994. "On the possibility of efficient bilateral trade," Review of Economic Design, Springer, vol. 1(1), pages 79-102, December. [Downloadable!] (restricted)
  4. Felipe Zurita, 2004. "Essays on Speculation," Levine's Working Paper Archive 618897000000000849, David K. Levine. [Downloadable!]
  5. Darrell Duffie & Yeneng Sun, 2004. "The Exact Law of Large Numbers for Independent Random Matching," Levine's Bibliography 122247000000000328, UCLA Department of Economics. [Downloadable!]
  6. Max Blouin & Roberto Serrano, 1998. "A Decentralized Market with Common Values Uncertainty: Non-Steady States," Working Papers 98-5, Brown University, Department of Economics, revised 10 Aug 1998. [Downloadable!]
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  7. José Ramón Martínez-Resano, 2005. "Size and heterogeneity matter. A microstructure-based analysis of regulation of secondary markets for governments bonds," Banco de España Occasional Papers 0501, Banco de España. [Downloadable!]
  8. Lones Smith & Axel Anderson, 2002. "Assortative Matching, Reputation, and the Beatles Break-Up," Game Theory and Information 0201002, EconWPA. [Downloadable!]
  9. Roberto Serrano, 2007. "Bargaining," Working Papers 2007-06, Instituto Madrileño de Estudios Avanzados (IMDEA) Ciencias Sociales. [Downloadable!]
  10. Edward J. Green, 1991. "Eliciting traders' knowledge in "frictionless" asset market," Staff Report 144, Federal Reserve Bank of Minneapolis. [Downloadable!]
  11. Aldo Rustichini, 1990. "Convergence to Price-Taking Behavior in a Simple Market," Discussion Papers 914, Northwestern University, Center for Mathematical Studies in Economics and Management Science. [Downloadable!]
  12. Luis Araujo & Braz Camargo, 2005. "Monetary Equilibrium with Decentralized Trade and Learning," UWO Department of Economics Working Papers 20051, University of Western Ontario, Department of Economics. [Downloadable!]
  13. Artyom Shneyerov & Adam Chi Leung Won, 2008. "The Rate of Convergence to Perfect Competition of Matching and Bargaining Mechanisms," Discussion Papers 1467, Northwestern University, Center for Mathematical Studies in Economics and Management Science. [Downloadable!]
  14. Philipp Kircher & Andrew Postlewaite, 2008. "Strategic Firms and Endogenous Consumer Emulation," PIER Working Paper Archive 08-003, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania. [Downloadable!]
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  15. Max Blouin, 2001. "Equilibrium in a Decentralized Market with Adverse Selection," Cahiers de recherche CREFE / CREFE Working Papers 128, CREFE, Université du Québec à Montréal, revised Mar 2001. [Downloadable!]
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