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How trade splits up information sets and dealers carry out their brokerage of asymmetric information

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Author Info
Rodolfo Apreda

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Abstract

n this paper we set forth a new perspective from which to understand and measure the brokerage of asymmetric information that intermediaries usually carry out. Firstly, we deal with partitions of a given set so as to lay grounds to our line of research. Secondly, we argue that trade splits up imperfect information sets, over which traders try to negotiate and profit, but also hide their opportunistic behavior from their counterparts. Next, the brokerage of asymmetric information is framed so as to stress the fact that any exchange is dual, entailing not only bargaining property rights but also information value. Lastly, we bring to light the linkage between differential rates, residual information sets and trading environments, which seems to be a functional toolkit for assessing how much asymmetric information is brokered eventually.

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File URL: http://www.cema.edu.ar/publicaciones/download/documentos/288.pdf
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Publisher Info
Paper provided by Universidad del CEMA in its series CEMA Working Papers: Serie Documentos de Trabajo. with number 288.

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Date of creation: Mar 2005
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Handle: RePEc:cem:doctra:288

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Related research
Keywords: asymmetric information; brokerage; differential rates; residual information sets; financial intermediaries;

Find related papers by JEL classification:
G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies
D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information
D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory

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  1. Rodolfo Apreda, 2005. "Public Governance. A Blueprint for Political Action and Better Government," CEMA Working Papers: Serie Documentos de Trabajo. 297, Universidad del CEMA. [Downloadable!]
  2. Rodolfo Apreda, 2007. "The rise of corporate governance brokers and how they trade in asymmetric information," CEMA Working Papers: Serie Documentos de Trabajo. 341, Universidad del CEMA. [Downloadable!]
  3. Rodolfo Apreda, 2005. "It is for global governance to sharpen up international relations by fulfilling a fiduciary role and carrying out the brokerage of asymmetric information," CEMA Working Papers: Serie Documentos de Trabajo. 302, Universidad del CEMA. [Downloadable!]
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