Contributions

  • Garleanu, Nicolae. - Contributor
  • Pedersen, Lasse Heje. - Contributor
  • National Bureau of Economic Research. - Contributor

Publication

2004 - National Bureau of Economic Research, Cambridge, Mass, Massachusetts

Language

English

Word Count

11,750 words, Guess

Page Count

47 pages

Identifiers

Classifications

  • LCCHB1

Description

"We study how intermediation and asset prices in over-the-counter markets are affected by illiquidity associated with search and bargaining. We compute explicitly the prices at which investors trade with each other as well as marketmakers' bid and ask prices in a dynamic model with strategic agents. Bid-ask spreads are lower if investors can more easily find other investors, or have easier access to multiple marketmakers. With a monopolistic marketmaker, bid-ask spreads are higher if investors have easier access to the marketmaker. We characterize endogenous search and welfare, and discuss empirical implications"--National Bureau of Economic Research web site.

Subjects

Links

Other Editions

  • Over-the-counter marketsNational Bureau of Economic Research2004-01-01

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