| By: |
Giovanni Cespa (University of Salerno, CSEF and CEPR) |
| 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. Similarly to 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 a tighter control over the flow of
information. 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. |
| Keywords: |
Information Sales, Analysts, Insider Trading, Durable Goods Monopolist. |
| JEL: |
G10 G12 G14 L12 |
| Date: |
2007–01–01 |
| URL: |
http://d.repec.org/n?u=RePEc:sef:csefwp:174&r=mst |