Insider trading: Regulation, securities markets, and welfare under risk aversion

被引:1
作者
Estrada, J [1 ]
机构
[1] CARLOS III UNIV,MADRID,SPAIN
关键词
D O I
10.1016/1062-9769(95)90040-3
中图分类号
F [经济];
学科分类号
02 ;
摘要
I analyze in this article the impact of insider trading regulation (ITR) on a securities market and on social welfare, and argue that the imposition of ITR forces a reallocation of wealth and risk that decreases social welfare. Three reasons explain this result: First, ITR increases the volatility of securities prices; second, it worsens the risk sharing among investors; and, third it diverts resources from the productive sector of the economy. Further, although I formally establish conditions under which ITR makes society better off, I argue that those conditions are not useful to justify the imposition of this regulation.
引用
收藏
页码:421 / 449
页数:29
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