How Naiveté improves efficiency in trading with preplay communication

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.

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Year of publication:	2012
Authors:	Saran, Rene
Published in:	Economics Letters. - Elsevier, ISSN 0165-1765. - Vol. 117.2012, 1, p. 311-314
Publisher:	Elsevier
Subject:	Double auction \| Preplay communication \| Naive traders \| Efficiency

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Type of publication:	Article
Classification:	C78 - Bargaining Theory; Matching Theory ; D82 - Asymmetric and Private Information
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10011041694