Corporate Information Sales and Market Liquidity: A Property Right Approach to Insider Trading

Giovanna Nicodano

CEPR Financial Markets Paper from European Science Foundation Network in Financial Markets, c/o C.E.P.R, 33 Great Sutton Street, London EC1V 0DX.

Abstract: Shareholders are attributed a residual right to use information on corporate prospects, which is produced within the firm. The firm allocates these rights to the highest bidder on behalf of shareholders. It is argued that this allocation is the natural benchmark for assessing the impact of insider trading on asset market equilibrium and for deriving policy implications.

Keywords: Inside Trading; Financial Structure; Property Rights (search for similar items in EconPapers)
Date: 1992-12
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