SFI Working Paper Abstract
1997
| Title: | Inefficient Delays in Strategic Trades |
| Author(s): | Kim-Sau Chung |
| Files: | [postscript] |
| Paper #: | 97-06-057 |
| Abstract: | Inefficient delays in trades can sometimes be observed after the arrival of important public news. This paper explains these phenomena with a model in which agents defer trades in the fear that they may be taken advantage of by better-informed trading partners. Under certain conditions, delay is inevitable, yet total collapse of trade can be avoided. |