no trade theorems
No trade theorems represent a class of results showing that, under certain conditions, trade in asset markets between rational agents cannot be explained on the basis of differences in information alone. They pose a challenge to provide a theoretical justification of the high trade volumes observed in financial markets. This article overviews existing no trade theorems and discusses alternative approaches to modelling information-based trade.
|This chapter was published in: Steven N. Durlauf & Lawrence E. Blume (ed.) , , pages , 2010, 3rd quarter update.|
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