6533b82bfe1ef96bd128d600
RESEARCH PRODUCT
Uninformed Traders in European Stock Markets
Salvatore Modicasubject
Divide and chooseFinancial economicsFinancial marketDownside riskInformation transmissionBusinessDownside risk aversionStock (geology)description
A fully informed agent bets with an uninformed over the capital gains of an asset. A divide-and-choose idea is adapted to induce both trade and revelation of information, but in equlibrium the uninformed buys high and sells low if he is downside risk averse. The result may be seen as an informed-price-maker counterpart of some findings of Glosten-Milgrom (1985) and Kyle (1985) on uninformed agents trading in financial markets.
| year | journal | country | edition | language |
|---|---|---|---|---|
| 2010-10-01 | STUDI ECONOMICI |