Eren, Nevzat; Ozsoylev, Han N. - Department of Economics, Oxford University - 2008
under which hype and dump manipulation can be an equilibrium outcome. We consider a discrete time, multi-period model with … trader. Nevertheless we show that it can be optimal for an informed trader to create false hype among uninformed traders … false hype allows the informed trader to sell at an inflated price or buy at a deflated one. Intense regulatory enforcement …