Rational expectation and information leakage with imperfect competition

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

Abstract

In financial market, the return of insider traders generally decreases with the increasing of informed trader number. But they have incentive to leak information to uninformed traders for higher return. We study the incentives to voluntarily leak information with imperfect competitive rational expectations. Our study shows that the return of insider traders is negatively corrected with the precision of leakage information and the number of receiver. When there are fewer receiver and less accurate leakage information, the market liquidity is very low and the loss of noise traders and the return of rational traders are very high.

Original languageEnglish
Title of host publicationProceedings of the 28th Chinese Control and Decision Conference, CCDC 2016
PublisherInstitute of Electrical and Electronics Engineers Inc.
Pages4180-4184
Number of pages5
ISBN (Electronic)9781467397148
DOIs
StatePublished - 3 Aug 2016
Event28th Chinese Control and Decision Conference, CCDC 2016 - Yinchuan, China
Duration: 28 May 201630 May 2016

Publication series

NameProceedings of the 28th Chinese Control and Decision Conference, CCDC 2016

Conference

Conference28th Chinese Control and Decision Conference, CCDC 2016
Country/TerritoryChina
CityYinchuan
Period28/05/1630/05/16

Keywords

  • Imperfect Competition
  • Information Leakage
  • Insider Traders
  • Rational Expectation

Fingerprint

Dive into the research topics of 'Rational expectation and information leakage with imperfect competition'. Together they form a unique fingerprint.

Cite this