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008180208s2018    oncd    ob   f000 0 eng d
040 |aCaOODSP|beng
041 |aeng|bfre
043 |an-cn---
0861 |aFB3-5/2018-7E-PDF
1001 |aDavoodalhosseini, S. Mohammad R.
24510|aAdverse selection with heterogeneously informed agents |h[electronic resource] / |cby S. Mohammad R. Davoodalhosseini.
260 |a[Ottawa] : |bBank of Canada, |c2018.
300 |aiii, 55 p. : |bcol. charts.
4901 |aBank of Canada staff working paper, |x1701-9397 ; |v2018-7
500 |a"February 2018."
504 |aIncludes bibliographical references.
5203 |a“A model of over-the-counter markets is proposed. Some asset buyers are informed in that they can identify high quality assets. Heterogeneous sellers with private information choose what type of buyers they want to trade with. When the measure of informed buyers is low, there exists a unique and stable equilibrium, and interestingly, price, trading volume and welfare typically decrease with more informed buyers. When the measure of informed buyers is intermediate, multiple equilibria arise, and price, trading volume and welfare may decrease or increase with more informed buyers, depending on the equilibrium being played. A switch from one equilibrium to another can lead to large drops in liquidity, price, trading volume and welfare, like a financial crisis. The measure of informed buyers is then endogenized by allowing buyers to invest in a technology that enables them to identify high quality assets. In this case, the model features endogenous strategic complementarity in acquiring the information technology. Multiple equilibria still exist, with different measures of informed buyers, but a scheme of tax/subsidy on information acquisition sometimes leads to the unique equilibrium"--Abstract, p. ii.
546 |aIncludes abstract in French.
69207|2gccst|aStock markets
693 4|aEconometric models
7102 |aBank of Canada.
830#0|aStaff working paper (Bank of Canada)|x1701-9397 ; |v2018-7|w(CaOODSP)9.806221
85640|qPDF|s1.03 MB|uhttps://publications.gc.ca/collections/collection_2018/banque-bank-canada/FB3-5-2018-7-eng.pdf