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Liquid bundles

Listed author(s):
  • Farhi, Emmanuel
  • Tirole, Jean

Parties in financial markets, industries, compensation design or politics may negotiate on either a piecemeal or a bundled basis. Little is known about the desirability of bundling when values are common and/or information endogenous. The paper shows that bundling encourages information-equalizing investments, thereby facilitating trade. It accordingly revisits and qualifies existing knowledge on security design.

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File URL: http://www.sciencedirect.com/science/article/pii/S0022053114001239
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Article provided by Elsevier in its journal Journal of Economic Theory.

Volume (Year): 158 (2015)
Issue (Month): PB ()
Pages: 634-655

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Handle: RePEc:eee:jetheo:v:158:y:2015:i:pb:p:634-655
DOI: 10.1016/j.jet.2014.09.002
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/622869

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