Purpose – The purpose of this paper is to examine the implications of asymmetric information for price evolution and investor behavior under a rational expectations framework. Design/methodology/approach – The author presents a simple asymmetric information‐based asset‐pricing model to...

Purpose–The purpose of this paper is to examine the implications of asymmetric information for price evolution and investor behavior under a rational expectations framework. Design/methodology/approach–The author presents a simple asymmetric information-based asset-pricing model to show that...