Chiu, Jonathan; Koeppl, Thorsten - Economics Department, Queen's University - 2011
equilibrium response to such a policy is intricate as it creates an announcement effect: a mere announcement of intervening at a … declines, the optimal intervention is delayed and it can be desirable to rely more on the announcement effect by increasing the … market more fragile with respect to a classic lemons problem. They dampen the announcement effect and cause the optimal …