Publication:
Costs and benefits of dynamic trading in a lemons market

Thumbnail Image
Identifiers
URI: https://hdl.handle.net/10016/31410
ISSN: 1094-2025
DOI: https://doi.org/10.1016/j.red.2019.03.002
UXXI: AR/0000024964
Files
cost_fuchs_RED_2019.pdf (987.09 KB)
Publication date
2019-07
Defense date
Authors
Advisors
Tutors
Journal Title
Journal ISSN
Volume Title
Publisher
Elsevier
Impact
Google Scholar
Export
Research Projects
Organizational Units
Journal Issue
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 always be improved upon if sellers are present at . Instead, continuous trading is optimal if sellers arrive stochastically over time.
Description
Keywords
Adverse selection, Bankruptcy, Market design, Rrading frequency
Bibliographic citation
Fuchs, W., Skrzypacz, A. (2019). Costs and benefits of dynamic trading in a lemons market. Review of Economic Dynamics, 33, 105–127
Collections
DE - Artículos de Revistas
OpenAIRE: Open Access Infrastructure for Research in Europe