On The Study Of Influence Of Openness Of Pricing Rule On Equilibria In Insider Trading

In this paper,we will focus on the study of influence of openness of pricing rule on equilibria in insider trading with different market structures.We first discuss some market characteristics of equilibria in insider trading both in monopoly market under open pricing rule and in stackelberg game market under non-open pricing rule.It shows that in the monopoly market,whether the pricing rule is open or not does not affect the final result of the market equilibrium,and that in cournot game market,if the pricing rule is open,the insider trading market equilibrium does not exists,or the insider trading equilibrium does exist,and that in a stackelberg game market,the equilibrium profit of the followed insider is better than that of the leader under the open pricing rule,while when pricing rule is not made public,the leader's profit is better than the follower's profit.Secondly,we establish a two-period stackelberg game model of insider trading with pricing rule not open,and prove that there are two linear equilibria in the market and further in each of the two equilibria,the total two-period condition expected profit of the leader is better than that of the follower,which is consistent with the result in single-period stackelberg game model.Finally,a single-period fair stackelberg game model of insider trading wiyh pricing rule not open is established,in which each of the two insider has the same opportunity to become a leader or a follower,and its equilibrium exists.