Document Type
Discussion Paper
Publication Date
2-1-2015
CFDP Number
1986
CFDP Pages
42
Abstract
We analyze price transparency in a dynamic market with private information and correlated 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. In a two-period case 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.
Recommended Citation
Fuchs, William and Skrzypacz, Andrzej, "Transparency and Distressed Sales under Asymmetric Information" (2015). Cowles Foundation Discussion Papers. 2412.
https://elischolar.library.yale.edu/cowles-discussion-paper-series/2412