Costs and Benefits of Dynamic Trading in a Lemons Market

We study a dynamic market with asymmetric information that induces the lemons problem. We compare efficiency of the market under different assumption about the timing of trade. We show that there generally exist conditions under which efficiency can be improved by temporarily closing the market as compared to continuous trading opportunities. Full paper and most current abstract available here: http://www.stanford.edu/~skrz/Dynamic_Lemons.pdf

Speaker Details

Andrzej (Andy) Skrzypacz is the Theodore J. Kreps Professor of Economics at the Stanford Graduate School of Business and a Professor, by courtesy at the Department of Economics. His research is in microeconomic theory, specializing in market design, economic dynamics and collusion. He is currently a co-editor of the American Economic Review and an associate editor at the Rand Journal of Economics. He has received a Stanford GSB PhD Distinguished Service Award in 2005 and has advised over a dozen of Ph.D. dissertations.

Date:
Speakers:
Andrzej Skrzypacz
Affiliation:
Stanford