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Manipulation based on information model

  • Beihang University
  • Beijing University of Chemical Technology

Research output: Chapter in Book/Report/Conference proceedingConference contributionpeer-review

Abstract

Treated as one of the chief symptoms of the business world's corruption, market manipulation based on inside information undermines investor confidence and severely disrupts the order of securities markets, which results in the maladjustment of resources allocation function of securities markets. We consider the strategy trading of uninformed and informed manipulator under large market as well as the impact for market equilibrium. Uninformed manipulator release dummy information, while informed manipulator disseminate private information. The demand schedule of informed trader and follower is unaffected by manipulator, and their trading intensity is in direct proportion to precision of the private signal. The expected utility of uninformed manipulator and market depth will increase and price informativeness will decrease under the situation of uninformed manipulator manipulating market, so uninformed manipulator must manipulate market once they have the opportunity. Informed manipulator will manipulate market in the following case: their private information is close to (seriously deviate) other's average information, precision of their information is very high (low) and the influence of them is low (high).

Original languageEnglish
Title of host publicationProceedings of the 2015 27th Chinese Control and Decision Conference, CCDC 2015
PublisherInstitute of Electrical and Electronics Engineers Inc.
Pages6051-6056
Number of pages6
ISBN (Electronic)9781479970179
DOIs
StatePublished - 17 Jul 2015
Event27th Chinese Control and Decision Conference, CCDC 2015 - Qingdao, China
Duration: 23 May 201525 May 2015

Publication series

NameProceedings of the 2015 27th Chinese Control and Decision Conference, CCDC 2015

Conference

Conference27th Chinese Control and Decision Conference, CCDC 2015
Country/TerritoryChina
CityQingdao
Period23/05/1525/05/15

Keywords

  • Informed Manipulator
  • Market Equilibrium
  • Market Manipulation
  • Uninformed Manipulator

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