Abstract
We analyze how the anonymous trading of uninformed agents affects the characterization of security market equilibrium. We show that the degree of anonymity provided by a market alters the distribution of wealth across agents, the depth of the market, and the incentive agents have to acquire private information about a security's fundamental value. Moreover, the nature of these effects depends on the type of information about uninformed trading that is revealed to market participants. Our results have implications for sunshine trading, dual trading, brokerage relationships, automation and decentralization of markets, and firms' security listing choices. G10, L10.
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