Information Uncertainty
- Author(s)
- Maarten Janssen, Santanu Roy
- Abstract
In a market where buyers and sellers are uncertain about whether
others are informed about the quality of an asset, inefficiency in trading
arises due to incomplete learning. An uninformed seller will want to
learn the asset's quality from the buyers'bids and may be willing to sell
at low, but not at intermediate bids. Buyers may have incentives to pool
their bids to prevent this type of learning. We outline conditions under
which potential gains from trade cannot be realized in states where all
traders are symmetrically informed or symmetrically uninformed.- Organisation(s)
- Department of Economics
- External organisation(s)
- Southern Methodist University
- No. of pages
- 29
- Publication date
- 08-2023
- Austrian Fields of Science 2012
- 502053 Economics
- Portal url
- https://ucris.univie.ac.at/portal/en/publications/information-uncertainty(76b679f0-d5a3-4af3-8eef-d48a4294682f).html