Knowledge flows and insider trading

David Howden

The Review of Austrian Economics, 2014, vol. 27, issue 1, 45-55

Abstract: Much insider trading literature focuses on the redistribution of monetary rents. This focus has led to ambiguous and conflicting results, unable to identify who the clear winners and losers of insider trading legislation are. Lacking any clearly defined beneficiary, an analysis of the origins and continued support of such legislation is lacking. This paper rectifies this omission by reassessing the involved agents not in light of their relationship to a company, but from all roles of the knowledge transmission process: creator, distributor and user. Information distributors—large news companies and investment houses—are argued to be sufficiently well organized to lobby for maintained and strengthened legislation to protect rents that would otherwise be greatly diminished. Copyright Springer Science+Business Media New York 2014

Keywords: Insider information; Asymmetric information; Redistribution; Regulation; D72; D82; G14; K22 (search for similar items in EconPapers)
Date: 2014
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Working Paper: Knowledge Flows and Insider Trading (2014)
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DOI: 10.1007/s11138-013-0209-9

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