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We examine the welfare costs of informed trade in a new sequential trade model with elastic uninformed traders. Welfare losses occur when the liquidity costs of executing a trade exceed the potential gains from the trade. With long-lived private information, more informed traders lead to better...
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decision theory to more fully explain both why the conventional law focuses on minimizing the risk of false-positive outcomes … and why the modern law should be crafted to minimize total probate-error risk. Decision theory suggests that, to identify …
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