Inside trading, public disclosure and imperfect competition

Fuzhou Gong and Hong Liu

International Review of Economics & Finance, 2012, vol. 24, issue C, 200-223

Abstract: We present a multi-period trading model in the style of Kyle's (1985) inside trading model, by assuming that there are at least two insiders in the market with long-lived private information, under the requirement that each insider publicly disclose his stock trades after the fact. The influences of “public disclosure” and “competition among insiders” on the trading behaviors of insiders and the market are studied. Moreover, we give the exact speed of the revelation of the private information, and show that all information is revealed immediately and the market depth goes to infinity immediately as trading happens infinitely frequently.

Keywords: Incomplete competition; Asymmetric information; Insider trading; Price discovery; Public disclosure (search for similar items in EconPapers)
JEL-codes: G12 G14 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:reveco:v:24:y:2012:i:c:p:200-223

DOI: 10.1016/j.iref.2012.03.003

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