Institutional design in equilibrium models of financial markets with asymmetric information
FP4 — Training and Mobility of Researchers
- Duration
- 1996-10-01 → 1997-09-30
- EU contribution
- —
- Participants
- 2
- Scheme
- RGI
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Project objective
The purpose of this project is to investigate the informational efficiency of prices in exchange institutions where alternative market formats, for trade on a single asset, coexist. In modern financial markets, this is often the case. A particularly common example is that of assets that get traded both in a centralized market and in an over the counter" or OTC market. In the first case, equilibrium prices are set as in a double auction, while in the second case, a search theoretical approach would be more appropriate. Market participants can be either informational traders or liquidity traders. The coexistence of the two market forms described, will improve informational efficiency of prices, if informed traders are more attracted to the centralized markets, and noise traders more attracted to the OTC market. I will look for conditions under which this is the case."
Original text from CORDIS.
Participants
Links
Data: CORDIS, © European Union