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In a market for assets, there are two types, AA and BB. Buyers value AA at $5,550 each and value BB at $4,799, while sellers
In a market for assets, there are two types, AA and BB. Buyers value AA at $5,550 each and value BB at $4,799, while sellers of AA value them at $5,210 and value BB at $4,600. If buyers don't observe type, but believe that fraction 0.65 are type AA, then what is the maximum price the buyers are willing to pay? a 1 pts In a financial market, sellers value security Go at $1,100 and security Stop at $1,660. Buyers on the other hand value Go at $1,400 and Stop at $1,794. If buyers cannot observe security type prior to purchase, what is the minimum fraction x of type Stop needed in the market to avoid adverse selection and sustain trade in both types
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