Size-discovery mechanisms allow large quantities of an asset to be exchanged at a price
that does not respond to price pressure. Primary examples include \workup" in Treasury
markets, \matching sessions" in corporate bond and CDS markets, and block-trading
\dark pools" in equity markets. By freezing the execution price and giving up on market-
clearing, size-discovery mechanisms overcome concerns by large investors over their price
impacts. Price-discovery mechanisms clear the market, but cause investors to internal-
ize their price impacts, inducing costly delays in the reduction of position imbalances.
We show how augmenting a price-discovery mechanism with a size-discovery mechanism
improves allocative eciency.
regulatory disclosure delegation size discovery allocative eciency workup dark pool market design