Peck, and seminar audiences at many universities. Financial support from the HCM program of

We examine the conditions under which competitive equilibria can be obtained as the limit, when the number of strategic traders gets large, of Nash equilibria in economies with asymmetric information on agents ' e ort and possibly imperfect observability of agents ' trades. Convergence always occur when either e ort is publicly observed (no matter what is the information available to intermediaries on agents ' trades); or e ort is private information but agents ' trades are perfectly observed; or no information at all is available on agents ' trades. On the other hand, when each intermediary can observe its trades with an agent, but not the agent's trades with other intermediaries, the (Nash) equilibria with strategic intermediaries do not converge to any of the competitive equilibria, for an open set of economies. The source of the di culties for convergence is the combination of asymmetric information and the restrictions on the observability of trades which prevent the formation of exclusive contractual relationships and generate barriers to entry in the markets for contracts. 3 1