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- W2293001551 abstract "In many over-the-counter asset markets, prices are negotiated bilaterally and bargaining over prices takes time. We show that bargaining delays arise when investors have precise private information about the asset quality, but the public information (e.g. credit ratings, benchmarks, past quotes) is coarse. We incorporate this type of bargaining delays into the standard dynamic equilibrium model of over-the-counter markets with search delays a la Duffie, Garleanu and Pedersen (2005) and derive implications of both delays for prices and liquidity. Search and bargaining delays have opposite effects on the range of traded assets showing that the current approach that views search delays as a proxy for all types of delays is with a loss. Conditional on the public information, the liquidity is U-shaped in the quality and assets in the middle of the quality range may not be traded, which contrasts with the descreasing liquidity in asymmetric-information models." @default.
- W2293001551 created "2016-06-24" @default.
- W2293001551 creator A5089477108 @default.
- W2293001551 date "2016-05-11" @default.
- W2293001551 modified "2023-09-26" @default.
- W2293001551 title "Over-the-Counter Markets with Bargaining Delays: The Role of Public Information in Market Liquidity" @default.
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