Mauring, Eeva <br/><br/>
Informational cycles in search markets 

 - American Economic Journal: Microeconomics  
 - 12(4), Nov, 2020: p.170-192 
<br/><br/> I show that market participants' equilibrium beliefs can create fluctuations in the volume of trading, even in a stationary environment. I study a sequential search model where buyers face an unknown distribution of offers. Each buyer learns about the distribution by observing whether a randomly chosen buyer traded yesterday. A cyclical equilibrium exists where the informational content of observing a trade fluctuates, which leads to fluctuations in the volume of trading. The cyclical equilibrium is more efficient than steady-state equilibria. The efficiency result holds also if buyers get a signal about past transaction prices or past trading volumes. – Reproduced <br/><br/> 
<br/><br/><label>Subjects--Topical Terms: </label><br/>Asymmetric and private information; Mechanism design