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The present study contributes to the ongoing debate on possible costs and benefits of insider trading. We present a novel call auction model with insider information. Our model predicts that more insider information improves informational efficiency of prices, but this comes at the expense of...
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, price regulation should be accompanied by licensing arrangements that cap the number of experts in the market. Our theory … provide higher quality services to all consumers. The externality renders the market outcome inefficient. Price regulation … provides a novel rationale for the wide-spread use of price regulation and licensing in real-world markets for expert services. …
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We study road supply by competing firms between a single origin and destination. In previous studies, firms simultaneously set their tolls and capacities while taking the actions of the others as given in a Nash fashion. Then, under some widely used technical assumptions, firms set the same...
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Why do people appear to forgo information by sorting into “echo chambers”? We construct a highly tractable multi-sender, multi-receiver cheap talk game in which players choose with whom to communicate. We show that segregation into small, homogeneous groups can improve everybody’s...
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