On bargaining with endogenous information

Dang, Tri Vi

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URL: https://ub-madoc.bib.uni-mannheim.de/2623
URN: urn:nbn:de:bsz:180-madoc-26239
Document Type: Working paper
Year of publication: 2005
The title of a journal, publication series: Rationalitätskonzepte, Entscheidungsverhalten und ökonomische Modellierung
Volume: 05-38
Place of publication: Mannheim
Publication language: English
Institution: School of Law and Economics > Sonstige - Fakultät für Rechtswissenschaft und Volkswirtschaftslehre
MADOC publication series: Sonderforschungsbereich 504 > Rationalitätskonzepte, Entscheidungsverhalten und ökonomische Modellierung (Laufzeit 1997 - 2008)
Subject: 300 Social sciences, sociology, anthropology
Classification: JEL: D83 C78 D82 ,
Subject headings (SWD): Verhandlungstheorie , Asymmetrische Information , Informationsverhalten , Auktionstheorie , Theorie
Keywords (English): double auction , endogenous lemons problem , information acquisition , speculation
Abstract: Two ex ante identically informed agents play a double auction over the division of a trading surplus with endogenous information and common values. This paper shows that if information acquisition is not observable, three types of inefficiencies can arise. If the information cost is in an intermediate range, no pure strategy equilibrium with trade exists although the agents maintain symmetric information. If the information cost is low, any trading equilibrium exhibits costly information acquisition. If the agents face asymmetric information cost the Akerlof’s lemons problem arises as a self-fulfilling equilibrium and only partial trade occurs.
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