Briefing
How Private Information Distorts OTC Market Outcomes
Abstract: Information frictions in over-the-counter markets reduce asset creation, trading volume and overall welfare compared to complete information economies. Because investors can't easily gauge others' private valuations of assets, potentially efficient trades are lost. Private information skews ownership and trading patterns, favoring high-valuation investors and reducing the role of middlemen.
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https://www.richmondfed.org/publications/research/economic_brief/2025/eb_25-26
Description: Briefing
Authors
Bibliographic Information
Provider: Federal Reserve Bank of Richmond
Part of Series: Richmond Fed Economic Brief
Publication Date: 2025-07-02
Volume: 25
Issue: 26