Repurchase Options in the Market for Lemons

<p dir="ltr">This journal contribution is published Open Access by the publisher. Follow the DOI link to retrieve a copy of the full text. </p><p dir="ltr">We would like to thank Andrew Atkeson, Andrea Attar, Jeremy Bejarano, Jack Bigio, Simon Board, Patrick Bolton, Briana Chang, Mohammad Davoodalhosseini, Andres Drenik, Andrea Eisfeldt, Piero Gottardi, Veronica Guerrieri, Barney Hartman-Glaser, Pablo Kurlat, Moritz Meyer-ter-Vehn, Ken Miyahara, Facundo Piguillem, Joao Ramos, Pablo Ottonello, Tano Santos, Joseph Stiglitz, Andre Sztutman, Victoria Vanasco, Liangjie Wu, and William Zame for useful conversations. We are especially thankful to Florian Scheuer, whose sharp questions helped us clarify important features of this paper. Big thanks the hospitality of the Federal Reserve Bank of San Francisco. Also, we would like to thank seminar participants at EIEF, Stanford, UCLA, Shanghai University of Finance and Economics, World Congress of the Econometric Society, Tor Vergata Workshop: Markets, Information and the Macroeconomy, Rice University, University of Hong Kong, Essex-UCL Workshop on Decentralized Financial Markets, and Office of Financial Research.</p>