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The Information Content of Specialist Pricing
1985
Journal of Political Economy
This paper examines a process by which information-revealing prices are determined by considering the private incentives of a price-setting agent (whom we refer to as a specialist). The specialist has private information that may be (partially) revealed through his choice of a pricing rule. We define an equilibrium as a pricing rule and a response to that rule by a representative trader that maximizes the expected utilities of the specialist and the trader, conditional on each having rational
doi:10.1086/261287
fatcat:bks3x6uthfc6begrybxmxozume