Information provision in financial markets

Markets for Financial Information

Information Dispersion in Financial Markets

Public disclosures can level information asymmetry in financial markets by removing informed traders’ advantage, or can exacerbate asymmetry by further increasing these traders’ knowledge of the firm. This study finds evidence of the latter phenomenon in earnings conference calls, where management releases new information, and financial analysts on the call immediately respond and question mana...

Information Communication in Financial Markets∗

Empirical evidence shows word-of-mouth communication has real effects on trading patterns in financial markets. On top of that, the social network through which the information conveys also plays a crucial role. We propose a framework that allows informed traders to directly and truthfully communicate information in four major social interaction structures represented by circle, tree, star and ...

Information Sellers in Financial Markets

This paper analyzes the market for financial information and the incentive of institutions, such as Reuters, to provide information to traders in decentralized financial markets. We derive the following results. (i) The optimal selling strategy consists of selling identical information (Reuters’ screen) to all traders. (ii) The traders buy information from the same providers. If the traders may...

Competitive information provision in sequential search markets

We study competitive information provision in search markets. Consider the used car market: as a consumer searches, she receives noisy signals of the values of cars. She can consult an expert (say Carfax or a mechanic) to find out more about the true value before deciding whether to purchase a particular car or keep searching. Prior research has studied the pricing problem faced by a monopolist...