Publication:
Insider trading: regulation, risk reallocation, and welfare

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URI: https://hdl.handle.net/10016/3900
ISSN: 2340-5031
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we950804.pdf (295.84 KB)
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1995-02
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Abstract
I argue in this paper that the imposition of insider trading regulations on a securities market generates not on1y a reallocation of wealth from insiders to liquidity traders, but also a reallocation of risk from the former to the latter. I further argue that, although the wealth reallocation has no impact on social welfare, under plausible assumptions, the risk reallocation imposes a cost on society.
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Insider trading, Securities Regulation
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DE - Working Papers. Economics. WE
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