Liquid bundles

Emmanuel Farhi, Jean Tirole*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

14 Scopus citations

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.

Original languageEnglish (US)
Pages (from-to)634-655
Number of pages22
JournalJournal of Economic Theory
Volume158
Issue numberPB
DOIs
StatePublished - Jul 1 2015

Keywords

  • Information acquisition
  • Liquidity
  • Security design
  • Tranching

ASJC Scopus subject areas

  • Economics and Econometrics

Fingerprint

Dive into the research topics of 'Liquid bundles'. Together they form a unique fingerprint.

Cite this