Anmerkungen:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments July 12, 2020 erstellt
Beschreibung:
This paper analyzes OTC market participants' endogeneous search intensity in competitive equilibrium and social optimal cases. We develop a random search-and-match model where agents (market participants) are allowed to choose and adjust their search intensities based on two idiosyncratic states: asset position and liquidity need. We find that: [1] in competitive equilibria with different market parameters, agents can switch between the core and periphery on the trading network. [2] it is the social optimal case that there is no inter-mediation, in the sense that no agent searches at positive speeds on both the buy and sell sides of the market. In competitive equilibrium, there always exist some agents over-searching and some other agents under-searching. We also discuss related policy implications