Download or read book Taxation, Information Acquisition, and Trade in Decentralized Markets written by Tri-Vi Dang and published by . This book was released on 2022 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper shows that a transaction tax makes trades in decentralized markets more information sensitive and enlarges the range of information costs for which the equilibrium exhibits private information acquisition and endogenous adverse selection. A transaction tax reduces the probability of trade. The opposite implications hold for a tax on capital gains. The theoretical implications of a transaction tax are tested using a tax policy change in one segment of Singapore's housing market. Using various proxies for information sensitivity, the triple difference-in-difference analysis shows that a higher transaction tax reduces turnover more strongly when trades are more information sensitive.