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dc.contributor.authorAase, Knut K.
dc.contributor.authorGjesdal, Frøystein
dc.date.accessioned2016-05-23T13:19:54Z
dc.date.available2016-05-23T13:19:54Z
dc.date.issued2016-05-23
dc.identifier.issn1500-4066
dc.identifier.urihttp://hdl.handle.net/11250/2390064
dc.description.abstractThe single auction equilibrium of Kyle's (1985) is studied, in which market makers are not fiduciaries. They have some market power which they utilize to set the price to their advantage, resulting in positive expected profits. This has several implications for the equilibrium, the most important being that by setting a relatively modest "fee", the market maker is able to obtain a profit of the order of magnitude, and even better than, a perfectly informed insider. Our model indicates why speculative prices are more volatile than predicted by fundamentals. Noise traders may be uninformed, or partially informed. We analyze a situation where the market maker has private information as well as being non-fiduciary. In our model this leads to a more efficient market where the insider trades less and the market maker's profit increases.nb_NO
dc.language.isoengnb_NO
dc.publisherFORnb_NO
dc.relation.ispartofseriesDiscussion paper;8/16
dc.subjectInsider tradingnb_NO
dc.subjectasymmetric informationnb_NO
dc.subjectstrategic tradenb_NO
dc.subjectcorrelated tradenb_NO
dc.subjectprice distortionnb_NO
dc.subjectpartially informed market makernb_NO
dc.titleInsider trading with non-fiduciary market makersnb_NO
dc.typeWorking papernb_NO
dc.source.pagenumber49nb_NO


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