Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/202455 
Authors: 
Year of Publication: 
2019
Series/Report no.: 
Research Report No. 2019-1
Publisher: 
The University of Western Ontario, Department of Economics, London (Ontario)
Abstract: 
I study how trading motives in asset markets affect equilibrium outcomes and welfare. I focus on two types of trading motives - informational and allocational. I show that while a fully separating equilibrium is the unique equilibrium when trading motives are known, multiple equilibria exist when trading motives are unknown. Moreover, forcing traders to reveal their trading motives may harm welfare. I also use this model to study how an asset market may exit a fire sale equilibrium and how government programs may eliminate private information and improve agents' welfare.
Subjects: 
asset markets
private information
competitive search
government intervention
JEL: 
G12
D82
D83
G18
Document Type: 
Working Paper

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