This paper studies the effects of liquidity trading on the dynamics of a financial market under long-lived asymmetric information. Informed traders maximize the expected trading gains they can extract using their superior information, whereas risk-averse liquidity traders with disparate...

We study endogenous liquidity trading in a market with long-lived asymmetric information. We distinguish between public information, tractable information that can be acquired and intractable information that cannot be acquired. Besides information asymmetry and noise, the adverse-selection...

We study the effect of user incentives on software security in a network of individual users under costly patching and negative network security externalities. For proprietary software or freeware, we compare four alternative policies to manage network security: (i) consumer self-patching (where...

We examine the competition between procurement auctions and long-term relational contracts that emerges from the increased usage of electronic marketplaces. Procurement auctions create supply chain efficiencies by selecting the least costly bidder, and long-term relational contracts ensure the...

Two single-product firms with different quality levels and fixed limited capacities engage in sequential price competition in an essentially deterministic model where customers have heterogeneous valuations for both products. We develop conditions under which the leader (she) can take strategic...