Open AccessInformation aggregation in competitive markets
Author(s) -
Siga Lucas,
Mihm Maximilian
Publication year - 2021
Publication title -
theoretical economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 4.404
H-Index - 32
eISSN - 1555-7561
pISSN - 1933-6837
DOI - 10.3982/te3559
Subject(s) - aggregate (composite) , property (philosophy) , betweenness centrality , population , microeconomics , information aggregation , mathematical economics , economics , computer science , mathematics , data mining , philosophy , materials science , demography , epistemology , combinatorics , sociology , centrality , composite material
We study when equilibrium prices can aggregate information in an auction market with a large population of traders. Our main result identifies a property of information—the betweenness property—that is both necessary and sufficient for information aggregation. The characterization provides novel predictions about equilibrium prices in complex, multidimensional environments.