Title: Transparency and distressed sales under asymmetric information
Abstract: Theoretical EconomicsVolume 11, Issue 3 p. 1103-1144 Original ArticlesOpen Access Transparency and distressed sales under asymmetric information William Fuchs, William Fuchs [email protected] Haas School of Business, University of California, BerkeleySearch for more papers by this authorAniko Öry, Aniko Öry [email protected] School of Management, Yale UniversitySearch for more papers by this authorAndrzej Skrzypacz, Andrzej Skrzypacz [email protected] Graduate School of Business, Stanford University We thank Emmanuel Fahri, Brett Green, Terry Hendershot, Benjamin Hermalin, Johannes Hörner, Giorgio Martini, Christine Parlour, Alessandro Pavan, Nicolas Vieille, Pavel Zryumov, and participants of the 8th Annual Paul Woolley Center Conference at LSE, Central European University, CERGE, 2013 EEA Meetings, Federal Reserve Bank of Philadelphia, Jackson Hole Finance Conference, 23rd Jerusalem Summer School in Economic Theory, NBER Corporate Finance Meetings, University of Munich, UC Berkeley Theory Lunch, and Yale. We are also grateful for support for this project from the NSF. Search for more papers by this author William Fuchs, William Fuchs [email protected] Haas School of Business, University of California, BerkeleySearch for more papers by this authorAniko Öry, Aniko Öry [email protected] School of Management, Yale UniversitySearch for more papers by this authorAndrzej Skrzypacz, Andrzej Skrzypacz [email protected] Graduate School of Business, Stanford University We thank Emmanuel Fahri, Brett Green, Terry Hendershot, Benjamin Hermalin, Johannes Hörner, Giorgio Martini, Christine Parlour, Alessandro Pavan, Nicolas Vieille, Pavel Zryumov, and participants of the 8th Annual Paul Woolley Center Conference at LSE, Central European University, CERGE, 2013 EEA Meetings, Federal Reserve Bank of Philadelphia, Jackson Hole Finance Conference, 23rd Jerusalem Summer School in Economic Theory, NBER Corporate Finance Meetings, University of Munich, UC Berkeley Theory Lunch, and Yale. We are also grateful for support for this project from the NSF. Search for more papers by this author First published: 12 September 2016 https://doi.org/10.3982/TE2237Citations: 31 AboutPDF ToolsRequest permissionExport citationAdd to favoritesTrack citation ShareShare Give accessShare full text accessShare full-text accessPlease review our Terms and Conditions of Use and check box below to share full-text version of article.I have read and accept the Wiley Online Library Terms and Conditions of UseShareable LinkUse the link below to share a full-text version of this article with your friends and colleagues. Learn more.Copy URL Share a linkShare onFacebookTwitterLinkedInRedditWechat Abstract We analyze price transparency in a dynamic market with private information and interdependent values. Uninformed buyers compete inter- and intra-temporarily for a good sold by an informed seller suffering a liquidity shock. We contrast public versus private price offers. With two opportunities to trade, all equilibria with private offers have more trade than any equilibrium with public offers; under some additional conditions, we show Pareto dominance of the private-offers equilibria. If a failure to trade by the deadline results in an efficiency loss, public offers can induce a market breakdown before the deadline, while trade never stops with private offers. References 1 Akerlof, George A. (1970), "The market for 'lemons': Quality uncertainty and the market mechanism." The Quarterly Journal of Economics, 84, 488– 500. 1 Asriyan, Vladimir, William Fuchs, and Brett Green (2015), " Information spillovers in asset markets with correlated values." Working paper. 1 Bergemann, Dirk and Johannes Hörner (2014), " Should auctions be transparent?" Cowles discussion paper, Yale University. 1 Boehmer, Ekkehart, Gideon Saar, and Lei Yu (2005), "Lifting the veil: An analysis of pre-trade transparency at the NYSE." 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(1999), "Education signalling with preemptive offers." The Review of Economic Studies, 66, 509– 528. 10.1111/1467-937X.00096 Citing Literature Volume11, Issue3September 2016Pages 1103-1144 ReferencesRelatedInformation