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No Trade Under Verifiable Information

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  • Spyros Galanis

Abstract

No trade theorems examine conditions under which agents cannot agree to disagree on the value of a security which pays according to some state of nature, thus preventing any mutual agreement to trade. A large literature has examined conditions which imply no trade, such as relaxing the common prior and common knowledge assumptions, as well as allowing for agents who are boundedly rational or ambiguity averse. We contribute to this literature by examining conditions on the private information of agents that reveals, or verifies, the true value of the security. We argue that these conditions can offer insights in three different settings: insider trading, the connection of low liquidity in markets with no trade, and trading using public blockchains and oracles.

Suggested Citation

  • Spyros Galanis, 2025. "No Trade Under Verifiable Information," Papers 2506.04944, arXiv.org.
    • Handle: RePEc:arx:papers:2506.04944
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    References listed on IDEAS

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    1. Brunnermeier, Markus & Abadi, Joseph, 2018. "Blockchain Economics," CEPR Discussion Papers 13420, C.E.P.R. Discussion Papers.
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    More about this item

    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G41 - Financial Economics - - Behavioral Finance - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making in Financial Markets

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