We study trade between an informed seller and an uninformed buyer who have existing inventories of assets similar to those being traded. We show that these inventories may induce the buyer to increase the price (a "run-up") but may also make trade impossible (a "freeze") and hamper information...

It is widely believed that the practice of securitization is one of the causes that led to the 2007–2008 financial crisis. In this paper, I show that securitized products such as collateralized debt obligations (CDO) are particularly vulnerable to systematic risk and tend to show higher tail...