Transparency and price formation

• 成果类型: Article
• 署名作者: Kaya, Ayca; Liu, Qingmin
• 署名单位: University of Miami; Columbia University
• 刊物名称: THEORETICAL ECONOMICS
• ISSN/ISSBN: 1933-6837
• DOI: 10.3982/TE1566
• 发表日期: 2015-05-01
• 页码: 341-383
• 关键词: Coase conjecture; bargaining; durable goods monopoly; incomplete information; price formation; TRANSPARENCY

摘要

We study the role that price transparency plays in determining the efficiency and surplus division in a sequential bargaining model of price formation with asymmetric information. Under natural assumptions on type distributions and for any discount factor, we show that the unobservability of past negotiations leads to lower prices and faster trading. Unobservability, therefore, enhances the Coasian effect by fostering efficiency and diverting more of the surplus to the player who possesses private information. In addition, we show that the equilibrium is unique and is in pure strategies in the nontransparent regime; this stands in sharp contrast to the existing literature and allows for a better understanding of the Coasian effect and price observability.