Information Aggregation in a Competitive Economy

Time: 1.00pm - 2.00pm
Venue: R407 (FMG Library), 4th Floor, Lionel Robbins Building.
Speaker: Rohit Rahi (LSE)
Seminar title: Information Aggregation in a Competitive Economy

Abstract: We consider the market for a risky asset for which agents have interdependent private valuations. We study competitive rational expectations equilibria under the standard CARA-normal assumptions. Equilibrium is partially revealing even though there are no noise traders. Complementarities in information acquisition arise naturally in this setting. We characterize stable equilibria with endogenous information acquisition. Our framework encompasses the classical REE models in the CARA-normal tradition.