Unobservable investments, trade efficiency and search frictions
研究信息结构如何通过影响投资激励来影响市场效率，发现不可观测性导致的投资无法改善社会福利，而赋予投资者议价权可缓解匹配问题。
Abstract Information structure can affect market efficiency by influencing participants' investment incentives. In this case, the entrants' type distribution and the market trade efficiency are both affected by the information structure, so they are jointly determined and correlated. In order to investigate the effects of asymmetric information, this paper uses a random search model of ex ante investments and trade efficiency, assuming that the amount of investment remains the investor's private information. I show that the ex ante payoffs are equivalent to the equilibrium payoffs when investments are observable. In the unique steady state equilibrium, non‐degenerate investment distribution and price distribution emerge simultaneously with ex ante identical agents. The investments motivated by unobservability fail to improve social welfare due to the mismatches caused by unobservability. Allocating positive bargaining power to investors alleviates the mismatch problem and improves social welfare.