Di Maggio, Marco; Pagano, Marco - Istituto Einaudi per l'Economia e la Finanza (EIEF) - 2012
We study a model where some investors (hedgers) are bad at information processing, while others (speculators) have superior information-processing ability and trade purely to exploit it. The disclosure of fi
nancial information induces a trade externality; if speculators refrain from trading,...