In dealership markets, asymmetric information feeds through to higher transaction costs as dealers adjust their bid-ask spreads to compensate for anticipated losses. In this paper, we show that the presence of asymmetric information can also provide a positive externality to those market...

The information content of stock prices is analysed without imposing strong restrictions on traders' preferences and the distribution of dividends. Noise in the information contained in equilibrium prices arises from endogenous asset supply, which offsets price movements due to informed trading....

We consider trading against a hedge fund or large trader that must liquidate a large position in a risky asset if the market price of the asset crosses a certain threshold. Liquidation occurs in a disorderly manner and negatively impacts the market price of the asset. We consider the perspective...

We build a game theoretical model to examine how the level of information advantage of insiders and the competition between insiders and sophisticated investors affect stock price movements and traders' trading strategies and profits. We show that the competition between insiders and...

Although it is generally accepted that consumer confidence measures are informative signals about the state of the economy, theoretical macroeconomic models designed for the analysis of monetary policy typically do not provide a role for them. I develop a framework with asymmetric information in...

The problem of optimally designing information for multiple agents who interact in a game can be formulated as a linear program. We explore its dual representation and show that it provides a novel perspective and new economic insights into the information-design problem. Through the lens of the...

In this article I analyze a model of interest group influence on legislative voting through information transmission. The model shows how interest groups may manipulate voting coalitions to their advantage by crafting different messages to target different winning coalitions. Furthermore, if...

In environments with expected utility, it has long been established that speculative trade cannot occur (Milgrom and Stokey), and that the value of public information is negative in economies with risk-sharing and no aggregate uncertainty (Hirshleifer, Schlee). We show that these results are...

This paper studies robust Bayesian persuasion of a privately informed receiver in which the sender only has limited knowledge about the receiver's private information. The sender is ambiguity averse and has a maxmin expected utility function. We show that when the sender faces full ambiguity,...

A sender chooses ex ante how her information will be disclosed to a privately informed receiver who then takes one of two actions. The sender wishes to maximize the probability that the receiver takes the desired action. The sender faces an ex ante quantity-quality tradeoff: sending positive...