Decision Sciences
8 years ago

Institution investors key to reducing stock market manipulation and improving efficiency.

Economic Survey
Stock Market Manipulation Based on Real Information and Market Overreaction
Mingtao Wang

Paper Summary

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Stock market manipulation can happen when traders with a lot of money influence stock prices based on real information. This can lead to the stock market overreacting and not working efficiently. However, traders who use information to make decisions can help make the market work better and prevent overreactions. Introducing short selling can also help improve market efficiency and reduce manipulation. Big investors can have both positive and negative effects on market efficiency.