| Article ID | Journal | Published Year | Pages | File Type |
|---|---|---|---|---|
| 5060105 | Economics Letters | 2012 | 4 Pages |
Abstract
If a positive proportion of traders are naive (i.e., honestly reveal their types and bid/ask truthfully), then efficiency increases in a double auction with preplay communication. Presence of naive traders induces strategic traders to decrease the misrepresentation of their private information.
⺠We study a double auction with preplay communication when traders can be naive. ⺠Naive traders honestly reveal their types and bid/ask truthfully. ⺠Efficiency increases as the proportion of naive traders increases. ⺠Presence of naive traders reduces strategic misrepresentation.
Related Topics
Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
Rene Saran,