Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/101071
Authors: 
Stöckl, Thomas
Year of Publication: 
2013
Series/Report no.: 
Working Papers in Economics and Statistics 2013-11
Abstract: 
We study price efficiency and trading behavior in laboratory limit order markets with asymmetrically informed traders. Markets differ in the number of insiders present and in the subset of traders who receive information about the number of insiders present. We observe that price efficiency (i) is the higher the higher the number of insiders in the market but (ii) is unaffected by changes in the subset of traders who know about the number of insiders present. (iii) Independent of the number ofinsiders, price efficiency increases gradually over time. (iv) The insiders' information is reflected in prices via limit (market) orders if the asset's value is inside (outside) the bid-ask spread. (v) In situations where limit and market orders yield positive profits, insiders clearly prefer market orders, indicating a strong desire for immediate transactions.
Subjects: 
insider
competition
asset market
price efficiency
trading behavior
experimental economics
JEL: 
C92
D82
G12
G14
Document Type: 
Working Paper

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