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Markets with Multidimensional Private Information / Veronica Guerrieri, Robert Shimer.
- Format:
- Book
- Author/Creator:
- Guerrieri, Veronica.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w20623.
- NBER working paper series no. w20623
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2014.
- Summary:
- This paper explores price formation when sellers are privately informed about their preferences and the quality of their asset. There are many equilibria, including a semi- separating one in which each seller's price depends on a one-dimensional index of her preferences and asset quality. This multiplicity does not rely on off-the-equilibrium path beliefs and so is not amenable to standard signaling game refinements. The semi- separating equilibrium may be not Pareto efficient, even if it is not Pareto dominated by any other equilibrium. Instead, efficient allocations may require transfers across uninformed buyers, inconsistent with any equilibrium.
- Notes:
- Print version record
- October 2014.
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