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Market structure and insider trading

Wassim Daher and Leonard Mirman

Cahiers de la Maison des Sciences Economiques from Université Panthéon-Sorbonne (Paris 1)

Abstract: In this paper we examine the real and financial effects of two insiders trading in a static Jain-Mirman model (Henceforth JM). The first insider is the manager of the firm. The second insider is the owner. First, we study the change of the linear-equilibrium variables, in the presence of two insiders. Specifically, we show that the trading order and the real output of the manager are less in this model than in JM model. Secondly, we show that the stock price reveals more information than in Cournot duopoly and monopoly models studied by Jain-Mirman. Finally, we analyze the comparative statics (insiders' profits) of this model, when the market maker receives one or two signals

Keywords: Insider trading; stock prices; correlated signals; Kyle model (search for similar items in EconPapers)
JEL-codes: D82 G14 (search for similar items in EconPapers)
Pages: 25 pages
Date: 2004-03
New Economics Papers: this item is included in nep-fin and nep-fmk
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (16)

Downloads: (external link)
http://mse.univ-paris1.fr/pub/mse/cahiers2004/B04025.pdf (application/pdf)

Related works:
Journal Article: Market structure and insider trading (2007) Downloads
Working Paper: Market Structure and Insider Trading (2004) Downloads
Working Paper: Market Structure and Insider Trading (2004) Downloads
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