Optimal Insider Strategy with Law Penalties

José Fajardo ()

Revista Brasileira de Economia - RBE, 2016, vol. 70, issue 1

Abstract: We study the optimal continuous trading strategy of an insider whois subject to the possibility of law penalties due to her illegaltrading activity. Also, we discuss how to obtain the optimal penaltyrule in order to maximize a welfare function.

Date: 2016
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