Partnerships, Lemons and Efficient Trade
We analyze the possibility of efficient trade with informationally interdependent valuations and with a dispersed ownership. A crucial role is played by the sign of the derivatives that measure how valuation functions depend on others’ signals. If valuations are increasing functions of other agents’ signals, it is more difficult to achieve efficient trade with interdependent values than with private values (where the respective derivatives are zero.) In contrast, if valuations are decreasing functions of other agents’ signals, it is easier to achieve efficient trade with interdependent values. Our results unify and generalize the insights of Cramton et al. , Myerson and Satterthwaite , and Akerlof .
|Date of creation:||15 Jul 1999|
|Date of revision:|
|Note:||We wish to thank the German Science Foundation for financial help through SFB 504 and GK ”Finanz- und Guetermaerkte” at the University of Mannheim. We have greatly benefitted from the comments made by an associated editor and by two anonymous referees. We are also grateful to Jörg Nikutta and seminar participants at Bonn, Mannheim, University College London, and Tilburg for helpful remarks. e-mail: firstname.lastname@example.org|
|Contact details of provider:|| Postal: |
Phone: (49) (0) 621-292-2547
Fax: (49) (0) 621-292-5594
Web page: http://www.sfb504.uni-mannheim.de/Email:
More information through EDIRC
Web page: http://www.sfb504.uni-mannheim.de
|Order Information:|| Email: |
When requesting a correction, please mention this item's handle: RePEc:xrs:sfbmaa:01-18. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Carsten Schmidt)The email address of this maintainer does not seem to be valid anymore. Please ask Carsten Schmidt to update the entry or send us the correct address
If references are entirely missing, you can add them using this form.