Market Power and Information Revelation in Dynamic Trading
AbstractWe study a strategic model of dynamic trading where agents are asymmetrically informed over common value sources of uncertainty. There is a continuum of uninformed buyers and a finite number of sellers, some of them informed. When there is only one seller, full information revelation never occurs in equilibrium and the only information transmission happens in the first period. The outcome with n sellers depends both on the structure of sellers' information and the intensity of competition among them allowed by the market rules. We show that the latter plays an even more important role. With intense competition (absence of clienteles), information is fully and immediately revealed to the buyers in every equilibrium for n large enough, both when all sellers are informed and when only one seller is informed. On the other hand, with a less intense form of competition (presence of clienteles), collusive equilibria, where information is never revealed, also exist, whatever the number of sellers. Moreover, when only one seller is informed, for many parameter configurations there are no equilibria with full information revelation, for any n.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by EconWPA in its series Game Theory and Information with number 0203005.
Length: 40 pages
Date of creation: 14 Mar 2002
Date of revision:
Note: Type of Document - pdf; prepared on IBM PC; to print on HP/PostScript; pages: 40
Contact details of provider:
Web page: http://220.127.116.11
subliminal extant Smith economagic gmm;
Other versions of this item:
- Piero Gottardi & Roberto Serrano, 2005. "Market Power And Information Revelation In Dynamic Trading," Journal of the European Economic Association, MIT Press, vol. 3(6), pages 1279-1317, December.
- Piero Gottardi & Roberto Serrano, 2002. "Market Power and Information Revelation in Dynamic Trading," Economics Working Papers 0027, Institute for Advanced Study, School of Social Science.
- Piero Gottardi & Roberto Serrano, 2004. "Market Power and Information Revelation in Dynamic Trading," CESifo Working Paper Series 1300, CESifo Group Munich.
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
- C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
- D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search, Learning, and Information
This paper has been announced in the following NEP Reports:
- NEP-ALL-2002-06-13 (All new papers)
- NEP-GTH-2002-07-04 (Game Theory)
- NEP-MIC-2002-06-18 (Microeconomics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Martin W Cripps & Jeroen M Swinkels, 2003.
"Efficiency of Large Double Auctions,"
Levine's Working Paper Archive
666156000000000329, David K. Levine.
- Vives, X., 1992.
"The Speed of Information Revelation in a Financial Market Mechanism,"
UFAE and IAE Working Papers
174.92, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
- Vives Xavier, 1995. "The Speed of Information Revelation in a Financial Market Mechanism," Journal of Economic Theory, Elsevier, vol. 67(1), pages 178-204, October.
- Xavier Vives, 1992. "The Speed of Information Revelation in a Financial Market Mechanism," CEPR Financial Markets Paper 0016, European Science Foundation Network in Financial Markets, c/o C.E.P.R, 77 Bastwick Street, London EC1V 3PZ.
- Shapley, Lloyd S & Shubik, Martin, 1977. "Trade Using One Commodity as a Means of Payment," Journal of Political Economy, University of Chicago Press, vol. 85(5), pages 937-68, October.
- Dipjyoti Majumdar & Artyom Shneyerov & Huan Xie, 2010.
"How Optimism Leads to Price Discovery and Efficiency in a Dynamic Matching Market,"
10004, Concordia University, Department of Economics.
- Majumdar, Dipjyoti & Shneyerov, Art & Xie, Huan, 2010. "How Optimism Leads to Price Discovery and Efficiency in a Dynamic Matching Market," Microeconomics.ca working papers artyom_shneyerov-2010-32, Vancouver School of Economics, revised 26 Oct 2010.
- BOCHET, Olivier, 2005.
"Switching from complete to incomplete information,"
CORE Discussion Papers
2005063, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- J.Ramon Martinez-Resano, 2005. "Size And Heterogeneity Matter. A Microstructure-Based Analysis Of Regulation Of Secondary Markets For Government Bonds," Finance 0508007, EconWPA.
- Michael Peters & Sergei Severinov, 2008.
"An ascending double auction,"
Springer, vol. 37(2), pages 281-306, November.
- Yusuke Kamishiro & Roberto Serrano, 2009.
"Equilibrium Blocking in Large Quasilinear Economies,"
2009-12, Brown University, Department of Economics.
- Yusuke Kamishiro & Roberto Serrano, 2009. "Equilibrium blocking in large quasilinear economies," Working Papers 2009-12, Instituto Madrileño de Estudios Avanzados (IMDEA) Ciencias Sociales.
- Roberto Serrano & Yusuke Kamishiro, 2009. "Equilibrium Blocking In Large Quasilinear Economies," Working Papers wp2009_0911, CEMFI.
- Dmitry Levando, 2012. "A Survey Of Strategic Market Games," Economic Annals, Faculty of Economics, University of Belgrade, vol. 57(194), pages 63-106, July - Se.
- Sergei Severinov & Michael Peters, 2004. "Internet Trading Mechanisms And Rational Expectations," Econometric Society 2004 North American Winter Meetings 551, Econometric Society.
- Isaac, Tanguy, 2011. "A new equilibrium in the one-sided asymmetric information market with pairwise meetings," Mathematical Social Sciences, Elsevier, vol. 61(3), pages 152-156, May.
- Bochet,Olivier, 2005. "Switching from Complete to Incomplete Information," Research Memorandum 035, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
- José Ramón Martínez-Resano, 2005. "Size and heterogeneity matter. A microstructure-based analysis of regulation of secondary markets for governments bonds," Banco de Espaï¿½a Occasional Papers 0501, Banco de Espa�a.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (EconWPA).
If references are entirely missing, you can add them using this form.