Two-period model of insider trading with correlated signals

B-Tier
Journal: Journal of Mathematical Economics
Year: 2014
Volume: 52
Issue: C
Pages: 57-65

Authors (3)

Daher, Wassim (not in RePEc) Mirman, Leonard J. Saleeby, Elias G. (not in RePEc)

Score contribution per author:

0.670 = (α=2.01 / 3 authors) × 1.0x B-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

In this article, we extend the one-period model of Jain and Mirman (1999) for asset trading with two correlated signals to a two period model. We then prove the existence and uniqueness of the Bayesian linear equilibrium. Finally, we perform comparative statics analysis with respect to Kyle (1985). Our findings reveal that adding another correlated signal (the real signal) to the total order flow of Kyle (1985), increases the amount of information incorporated in the stock price at each period and decreases the insider’s expected profits at each period.

Technical Details

RePEc Handle
repec:eee:mateco:v:52:y:2014:i:c:p:57-65
Journal Field
Theory
Author Count
3
Added to Database
2026-01-25