EconPapers    
Economics at your fingertips  
 

Asymmetries of information in centralized order-driven markets

Nicolas Boccard () and Riccardo Calcagno

No 1999016, LIDAM Discussion Papers IRES from Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES)

Abstract: We study the efficiency of the equilibrium price in a centralized, order-driven market where many asymmetrically informed traders are active for many periods. We show that asymmetries of information can lead to sub-optimal information revelation with respect to the symmetric case. In particular, we assess that the more precise the information the higher the incentive to reveal it, and that the value of private information is related to the volume of exogenous trade present on the market. Moreover, we prove that any informed trader, whatever his information, reveals his private signal during an active phase of the market, concluding that long pre-opening phases are not effective as an information discovering device in the presence of strategic players.

Keywords: Asymmetric information; pre-opening; insider trading (search for similar items in EconPapers)
JEL-codes: D82 D83 G12 G13 (search for similar items in EconPapers)
Pages: 26
Date: 1999-06-01
New Economics Papers: this item is included in nep-fmk
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://sites.uclouvain.be/econ/DP/IRES/9916.pdf (application/pdf)

Related works:
Working Paper: Asymmetries of information in centralized order-driven markets (1999) Downloads
Working Paper: Asymmetries of Information in Centralized Order-Driven Markets (1999) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ctl:louvir:1999016

Access Statistics for this paper

More papers in LIDAM Discussion Papers IRES from Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES) Place Montesquieu 3, 1348 Louvain-la-Neuve (Belgium). Contact information at EDIRC.
Bibliographic data for series maintained by Virginie LEBLANC ().

 
Page updated 2023-01-27
Handle: RePEc:ctl:louvir:1999016