Asset markets with heterogenoeus information

I define a notion of completitive equilibrium for asset markets where assets are heterogeneous and traders have heterogenoeus information about them. I then apply this notion to a model of distressed sales under asymmetric information and examine whether it can account for fire sales: sharp drops in prices when distressed agents need to sell assets. Standard models of asymmetric information with informed sellers, heterogenous assets and identical uninformed buyers predict the opposite phenomenon, as more distressed sellers on average sell less-adversely-selected pools of assets. With heterogeneity among buyers in their ability to distinguish assets of different qualities, the possibility of fire sales depends on the joint distribution of wealth and ability. Note This is a preliminary draft. I have tried to point out the things that I haven’t finished doing or I am not so sure about. Comments and suggestions are extremely welcome.