Cournot duopoly and insider trading with two insiders

Wassim Daher and Leonard Mirman

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Abstract: In this paper, we study a version of the static Jain-Mirman (2002) model in which competition in the real sector is introduced. In this paper, we add competition in the stock sector to the Jain-Mirman(2002) paper. We show that the linear equilibrium structure is affected by this competition in the financial sector. Specifically, we show that the stock price set by the market maker reveals more information and that the behavior of the profits of the manager depends on the parameters of the model. Moreover, we prove that the level of output produced by the manager is less than in Jain-Mirman (2002). Finally, we also study the case in which the market maker receives only one signal and analyze the comparative statics of this model when the market maker receives either one or two signals.

Keywords: Kyle model; Correlated signals; Stock prices; Insider Trading; prix du stock; agent informé; signaux corrélés; modèle de Kyle (search for similar items in EconPapers)
Date: 2004-09
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-03331519
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Published in 2004

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Related works:
Journal Article: Cournot duopoly and insider trading with two insiders (2006)
Working Paper: Cournot duopoly and insider trading with two insiders (2004)
Working Paper: Cournot duopoly and insider trading with two insiders (2004)
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