Symmetric Ignorance: The Cost of Anonymous Lemons
European Financial Managment
12 Pages Posted: 22 Aug 2019 Last revised: 11 Dec 2020
Date Written: August 18, 2019
Rules that restrict information required in negotiated private transactions have spurred a vast increase in the scope of anonymous financial markets, particularly in the US. The subtle costs of the information restricting rules raise questions about the social value of “completing” anonymous markets that would not naturally survive and did not historically exist.
Keywords: information asymmetry, securities markets, securitization, regulation, liquidity
JEL Classification: G10, G18, G28, G38, K22, N2
Suggested Citation: Suggested Citation