The work of Friedrich Von Hayek contains several testable predictions about the nature of market processes. Vernon Smith termed the most important one the 'Hayek Hypothesis': equilibrium prices and the gains from trade can be achieved in the presence of diffuse, decentralized information, and in...

Sudden big price changes are followed by periods of high and persistent volatility. I develop a tractable dynamic rational expectations model consistent with this observation. An infinity of agents possess dispersed information about future dividends and trade in centralized markets. Information...

Das verbraucherpolitische Instrument Verbraucherberatung soll die asymmetrische Informationsverteilung zwischen Verbrauchern und Unternehmen abbauen und Vertrauen in Märkte schaffen. Bei dieser Aufgabenstellung wird vernachlässigt, dass Verbraucherberatung selbst durch die asymmetrische...

Consumer advice should reduce asymmetric information between consumer and supplier as well as provide confidence in markets. However, consumer advice itself is characterised by asymmetric information between adviser and consumer. The article figures out this aspect and shows how consumers cope...

This paper introduces a theory of market incompleteness based on the information transmission role of prices and its adverse impact on the provision of insurance in financial markets. We analyse a simple security design model in which the number and payoff of securities are endogenous. Agents...

Das verbraucherpolitische Instrument Verbraucherberatung soll die asymmetrische Informationsverteilung zwischen Verbrauchern und Unternehmen abbauen und Vertrauen in Märkte schaffen. Bei dieser Aufgabenstellung wird vernachlässigt, dass Verbraucherberatung selbst durch die asymmetrische...

We investigate how an informed designer maximizes her objective when facinga player whose payoff depends on both the designer's private information andon an unknown state within the classical quasilinear environment. Thedesigner can disclose arbitrary information about the state via...