Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/62866
Authors: 
Cespa, Giovanni
Year of Publication: 
2007
Series/Report no.: 
Working Paper, Department of Economics, Queen Mary, University of London 613
Abstract: 
Fundamental information resembles in many respects a durable good. Hence, the effects of its incorporation into stock prices depend on who is the agent controlling its flow. Like a durable goods monopolist, a monopolistic analyst selling information intertemporally competes against herself. This forces her to partially relinquish control over the information flow to traders. Conversely, an insider solves the intertemporal competition problem through vertical integration, thus exerting tighter control over the information flow. Comparing market patterns I show that a dynamic market where information is provided by an analyst is thicker and more informative than one where an insider trades.
Subjects: 
Information sales
Analysts
Insider trading
Durable goods monopolist
JEL: 
G10
G12
G14
L12
Document Type: 
Working Paper

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