Economics, Econometrics and Finance
3 years ago

Regulators crack down on insider trading to stabilize markets.

1 view
Finance research letters
Inside trading with public information and market regulation
Hong Liu, Zaili Li

Paper Summary

Insider trading is regulated differently based on the number of insider traders involved. When there's only one insider trader, regulators don't enforce strict rules. But if there are multiple insider traders, regulations become stricter. However, having regulations in place makes markets more stable but less efficient.

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