Information Spillovers, Gains from Trade, and Interventions in Frozen Markets

• 成果类型: Article
• 署名作者: Camargo, Braz; Kim, Kyungmin; Lester, Benjamin
• 署名单位: University of Iowa; Federal Reserve System - USA; Federal Reserve Bank - Philadelphia
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hhv129
• 发表日期: 2016
• 页码: 1291
• 关键词: COMMON VALUE AUCTIONS; adverse selection; STOCK-PRICE; INVESTMENT SENSITIVITY; moral hazard; aggregation; acquisition; illiquidity; COMPETITION; EFFICIENCY

摘要

We study government interventions in markets suffering from adverse selection. Importantly, asymmetric information prevents both the realization of gains from trade and the production of information that is valuable to other market participants. We find a fundamental tension in maximizing welfare: while some intervention is required to restore trading, too much intervention depletes trade of its informational content. We characterize the optimal policy that balances these two considerations, and explore how it depends on features of the environment. Our model can be used to study a program introduced in 2009 to restore information production in the market for legacy assets.