Please use this identifier to cite or link to this item:
|Title:||Valuation in Over-The-Counter Markets|
Pedersen, Lasse Heje
|Abstract:||We provide the impact on asset prices of trade by search and bargaining. Under natural conditions, prices are higher if investors can find each other more easily, if sellers have more bargaining power, or if the fraction of qualified owners is greater. If agents face risk limits, then higher volatility leads to greater difficulty locating unconstrained buyers, resulting in lower prices. Information can fail to be revealed through trading when search is difficult. We discuss a variety of financial applications and testable implications.|
|Appears in Collections:||Finance Working Papers|
Items in FDA are protected by copyright, with all rights reserved, unless otherwise indicated.