Constrained efficiency is characterized in an asset market, subject to search frictions, where sellers are privately informed about the type of their asset. The determines opportunity cost for and quality buyers. constrained-efficient allocation implemented using a sales tax schedule. optimal schedule has single-crossing property, requiring trading low-quality assets be subsidized high-quality ...

This paper studies competitive allocations under adverse selection. We first provide a general necessary and sufficient condition for entry on an inactive market to be unprofitable. then use this result characterize, active market, unique budget-balanced allocation implemented by tariff making additional trades with entrant Motivated the recursive structure of allocation, we finally show that i...

This paper studies an insurance market on which privately informed consumers can simultaneously trade with several firms operating under a regulation that prohibits cross-subsidies between contracts. The regulated game supports single equilibrium allocation in each layer of coverage is fairly priced given the consumer types who purchase it. competitive cannot be Pareto-improved by social planne...

We study one-shot Nash competition between an arbitrary number of identical dealers that compete for the order flow a client. The client trades either because proprietary information, exposure to idiosyncratic risk, or mix both trading motives. When quoting their price schedules, do not know client’s type but only its distribution, and in turn choose quotes mitigate adverse selection inventory ...