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ifo Institut – Leibniz-Institut für Wirtschaftsforschung an der Universität München >
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http://hdl.handle.net/10419/18938
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| Title: | | Market power and information revelation in dynamic trading  |
| Authors: | | Gottardi, Piero Serrano, Roberto |
| Issue Date: | | 2004 |
| Series/Report no.: | | CESifo working papers 1300 |
| Abstract: | | We study a strategic model of dynamic trading where agents are asymmetrically informed over common value sources of uncertainty. There is a continuum of buyers and a finite number n of sellers. All buyers are uninformed, while at least one seller is privately informed about the true state of the world. When n = 1, full information revelation never occurs in equilibrium and the only information transmission happens in the first period. With n > 1 the outcome depends both on the structure of the sellers? information and, even more importantly, on the intensity of competition allowed by the trading rules. When there is intense competition (absence of clienteles), information is fully and immediately revealed to the buyers in every equilibrium for n large enough, regardless of the number of informed sellers. On the other hand, for trading arrangements characterized by less intense forms of competition (presence of clienteles), for any n we always have equilibria where information is never fully revealed. Moreover, in that case, when only one seller is informed, for many parameter configurations there are no equilibria with full information revelation, even for large n. |
| Subjects: | | asymmetric information information revelation dynamic trading oligopolistic competition clienteles |
| JEL: | | D82 C78 C72 D83 |
| Document Type: | | Working Paper |
| Appears in Collections: | | CESifo Working Papers, CESifo Group Munich
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