Objective
The goal of this proposal is to advance the theory of decentralized trade with informational asymmetries and limited commitment.
In most trading situations, some of the parties possess superior information about critical aspects of the environment. For example, in financial markets, professional investors are better informed about the quality of the assets that they sell to individuals. Similarly, consumers typically have private information about their willingness to pay for goods and services. It is well understood that informational asymmetries are responsible for one of the most serious forms of market inefficiency. Because of its strong assumptions in term of commitment, the standard theory of mechanism design is unsuitable for the study of many actual trading institutions. On the other hand, the focus of most of the existing literature on trading with limited commitment is the case in which the parties can trade at most once. While satisfactory in situations like the sale of a house, this assumption leaves out many important economic environments where the parties trade repeatedly over time. However, repeated transactions are natural both when the objects of trade are non-durable (e.g. services such as phone or internet plans) and when they are durable but divisible (e.g. financial assets). A crucial difference between these cases and those analyzed in the literature is the fact that the information revealed in early transactions may affect the outcome of future negotiations.
We plan to provide a systematic game-theoretic analysis of decentralized markets with repeated trading and informational asymmetries. Our investigation will shed light on the properties of various commonly used trading mechanisms and will inform us about possible remedies to make them more efficient. This will contribute substantially to the design of adequate institutions and to the regulation of markets.
Fields of science (EuroSciVoc)
CORDIS classifies projects with EuroSciVoc, a multilingual taxonomy of fields of science, through a semi-automatic process based on NLP techniques. See: https://op.europa.eu/en/web/eu-vocabularies/euroscivoc.
CORDIS classifies projects with EuroSciVoc, a multilingual taxonomy of fields of science, through a semi-automatic process based on NLP techniques. See: https://op.europa.eu/en/web/eu-vocabularies/euroscivoc.
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Programme(s)
Multi-annual funding programmes that define the EU’s priorities for research and innovation.
Multi-annual funding programmes that define the EU’s priorities for research and innovation.
Topic(s)
Calls for proposals are divided into topics. A topic defines a specific subject or area for which applicants can submit proposals. The description of a topic comprises its specific scope and the expected impact of the funded project.
Calls for proposals are divided into topics. A topic defines a specific subject or area for which applicants can submit proposals. The description of a topic comprises its specific scope and the expected impact of the funded project.
Call for proposal
Procedure for inviting applicants to submit project proposals, with the aim of receiving EU funding.
Procedure for inviting applicants to submit project proposals, with the aim of receiving EU funding.
ERC-2013-CoG
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Funding Scheme
Funding scheme (or “Type of Action”) inside a programme with common features. It specifies: the scope of what is funded; the reimbursement rate; specific evaluation criteria to qualify for funding; and the use of simplified forms of costs like lump sums.
Funding scheme (or “Type of Action”) inside a programme with common features. It specifies: the scope of what is funded; the reimbursement rate; specific evaluation criteria to qualify for funding; and the use of simplified forms of costs like lump sums.
Host institution
10128 Torino
Italy
The total costs incurred by this organisation to participate in the project, including direct and indirect costs. This amount is a subset of the overall project budget.