Liquid Bundles

Farhi, Emmanuel and Tirole, Jean (2015) Liquid Bundles. Journal of Economic Theory, 158. pp. 634-655.

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Official URL: http://tse-fr.eu/pub/28194

Abstract

Parties in financial markets, industries, compensation design or politics may negotiate on either a piecemeal or a bundled basis. Little is known about the desirability of bundling when values are common and/or information endogenous. The paper shows that bundling encourages information-equalizing investments, thereby facilitating trade. It accordingly revisits and qualifies existing knowledge on security design.

Item Type: Article
Language: English
Date: July 2015
Refereed: Yes
Uncontrolled Keywords: Liquidity, security design, tranching, information acquisition
JEL codes: D82 - Asymmetric and Private Information
E51 - Money Supply; Credit; Money Multipliers
G12 - Asset Pricing; Trading volume; Bond Interest Rates
G14 - Information and Market Efficiency; Event Studies
Subjects: B- ECONOMIE ET FINANCE
Divisions: TSE-R (Toulouse)
Site: UT1
Date Deposited: 16 Mar 2015 14:46
Last Modified: 24 Jan 2019 00:09
OAI ID: oai:tse-fr.eu:28194
URI: http://publications.ut-capitole.fr/id/eprint/16519

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