No Trade, Informed Trading, and Accuracy of Information

Jayanaka Wijeratne and Shino Takayama ()

No 411, Discussion Papers Series from University of Queensland, School of Economics

Abstract: We present a model in which there is uncertainty about realization of a risky asset value for an informed trader. Then, we show that the informed trader does not trade in equi- librium if the inside information the informed trader has is not sufficiently accurate. We use the framework presented by Glosten and Milgrom (1985) and extend the assumption that the informed trader knows the terminal value of the risky asset. Finally, we obtain the conditions under which the informed trader would not trade in equilibrium.

Date: 2010
New Economics Papers: this item is included in nep-cta and nep-mst
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https://economics.uq.edu.au/files/44757/411.pdf (application/pdf)

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Journal Article: No Trade, Informed Trading, and Accuracy of Information (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:qld:uq2004:411

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