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We analyze a strategic trading model where an overconfident insider is required to publicly disclose his trades after the fact. We find the more confident insider is more concerned about the effect the initial trading has on the future.
Persistent link: https://www.econbiz.de/10010594175
This work sets the market maker as overconfident and shows that this will lead to a higher informed trading intensity, a more efficient market, a larger informed profit and a lower adverse selection.
Persistent link: https://www.econbiz.de/10009249588