We study how the presence of short sellers affects the incentives of the insiders to trade on negative information. We show it induces insiders to sell more (shares from their existing stakes) and trade faster to preempt the potential competition from short sellers. An experiment and...

We analyze the imperfect competition among multiple informed traders in an economy with a risky asset whose liquidation value is private information and follows a mean-reverting process. The unique linear equilibrium has an analytic form and is explicitly analyzed. When there are more auctions...