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Cream-Skimming in Financial Markets| old_uid | 9827 |
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| title | Cream-Skimming in Financial Markets |
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| start_date | 2011/04/08 |
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| schedule | 15h |
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| online | no |
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| location_info | salle 1 |
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| summary | This talk reports on joint work with P. Bolton and T. Santos. We
propose a model where agents choose to become entrepreneurs or
informed dealers in financial markets. Agents incur costs to become
dealers and develop skills for valuing assets. The financial sector
comprises a transparent exchange, where uninformed agents trade, and
an opaque over-the-counter (OTC) market, where dealers offer
attractive terms for the best assets. Dealers provide incentives for
entrepreneurs to originate good assets, but the opaqueness of
the OTC market allows dealers to extract rents. By siphoning out good
assets, the OTC market lowers the quality of assets in the exchange.
In equilibrium, dealers' rents are excessive and attract too much
talent to Finance. |
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| oncancel | changement de lieu: 105 bd Raspail 75006 Paris |
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| responsibles | Berestycki, Nadal |
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