Competition and Information Leakage
研究机构投资者在柜台市场交易时，为何限制接触对手方数量和信息披露，模型揭示竞争加剧信息泄露导致抢先交易，并探讨最优信息设计及市场设计启示。
When seeking to trade in over-the-counter markets, institutional investors typically restrict both the number of potential counterparties they contact and the information they disclose (e.g., by requesting two-sided rather than one-sided quotes). We rationalize these important facts in a model featuring endogenous front-running. Although an additional contact intensifies competition and aids in finding a natural counterparty, it also intensifies information leakage—which can be costly if it helps a losing dealer to front-run. We also address information design: the client optimally provides no information about her trading direction when requesting quotes. We conclude with implications for market design and regulation.