| This paper constructs a regulatory model of insider trading in which an insider trader and multiple outsider traders share part of the information of risky asset,and analyzes the motivation of insider who voluntarily releases information to market maker under supervision.The conclusion is that the uncertainty of risky asset in advance,the number of outsiders and the degree of supervision will directly affect the decisionmaking of insider.When trading low-risk asset with a small number of outsiders,insider trader may not release any information;when there are multiple outsiders in the market at the same time,insider will strategically release a certain amount of information to market maker,so as to obtain more profits.The increase of supervision will further encourage insider to release more information until the public information is completely released to market maker.At the same time,it is found that under the same conditions,the price efficiency without supervision is higher than that with supervision,and the price efficiency with full information leakage is higher than that without information leakage.Then,the paper discusses the change of information leakage strategy of insider when the market strong efficiency condition deviates.It is found that when the deviation coefficient changes from positive to negative,insider will release more accurate information.The results provide a theoretical basis for insider to release information to Underwriters. |
PDF Full Text Request