Download This PaperNo Trade Under Verifiable Information
16 Pages Posted: 18 May 2020 Last revised: 1 May 2025
Date Written: April 30, 2025
Abstract
No trade theorems examine conditions under which agents cannot agree to disagree on the value of a security which pays according to some state of nature, thus preventing any mutual agreement to trade. A large literature has examined conditions which imply no trade, such as relaxing the common prior and common knowledge assumptions, as well as allowing for agents who are boundedly rational or ambiguity averse. We contribute to this literature by examining conditions on the private information of agents that reveals, or verifies, the true value of the security. We argue that these conditions can offer insights in three different settings: insider trading, the connection of low liquidity in markets with no trade, and trading using public blockchains and oracles.
Keywords: JEL Classification Numbers: D82, D83, D84, G14, G41 Blockchain, cryptocurrencies, oracles, no trade, agreeing to disagree
JEL Classification: D82, D83, D84, G14, G41
Suggested Citation: Suggested Citation
No Trade Under Verifiable Information
(April 30, 2025). Available at SSRN: https://ssrn.com/abstract=3581822 or http://dx.doi.org/10.2139/ssrn.3581822