Microeconomics Research Seminar Series, Spring Term 2022
16:00 - 17:30
Lectures, talks and seminars
Microeconomics Research Seminar Series
Economics, Department of
Join Chaojun Wang as they present research on Information Chasing versus Adverse Selection
Chaojun Wang, from Wharton School of the University of Pennsylvania, will present research on Information Chasing versus Adverse Selection.
Contrary to the prediction of the classic adverse selection theory, a more informed trader could receive better pricing relative to a less informed trader in over-the-counter financial markets. Dealers chase informed orders to better position their future quotes and avoid winner's curse in subsequent trades. When dealers are perfectly competitive and risk averse, their incentive of information chasing dominates their fear of adverse selection. In a more general setting, information chasing can dominate adverse selection when dealers face differentially informed speculators, while adverse selection dominates when dealers face differentially informed trades from a given speculator. These two seemingly contrasting predictions are supported by empirical evidence from the UK government bond market.
This seminar will be held at 4pm on Zoom. This event is open to all levels of study and is also open to the public. To register your place and gain access to the webinar, please contact the seminar organisers.
This event is part of the Microeconomics Research Seminar Series.