Work

Costs and benefits of dynamic trading in a lemons market

Year: 2019

Type: article

Abstract: We study a dynamic market with asymmetric information that creates the lemons problem. We compare efficiency of the market under different assumptions about the timing of trade. We identify positive and negative aspects of dynamic trading, describe the optimal market design under regularity conditions and show that continuous-time trading can be always improved upon.

Source: Review of Economic Dynamics

DOI: 10.1016/j.red.2019.03.002

Authors: William Fuchs, Andrzej Skrzypacz

Institutions: Universidad Carlos III de Madrid, The University of Texas at Austin, Stanford University

Language: English

Topic: Economic theories and models

Subfield: Economics and Econometrics

Field: Economics, Econometrics and Finance

Domain: Social Sciences

Open Access status: hybrid

Estimated APC paid: $1,100

Funder: European Research Council