Remedies to Informational Asymmetries in Stock Markets
By:Peter-Jan Engelen
Published on 2005 by Intersentia nv
Like many other markets, stock markets are characterised by asymmetric information. If investors cannot distinguish high-quality from low-quality securities, they will value all securities as average resulting in the well known market for lemons. This decreases the allocative efficiency and social welfare by guiding resources to the least good investment opportunities. How can high-quality listed companies communicate with stock markets to distinguish themselves from low-quality listed companies? Although proponents of mandatory disclosure rules in securities markets will answer this question with far-reaching governmental regulation, it is jumping to conclusions and skipping devices that signal the true quality of the investment opportunities to the stock market. This book analyses the functioning of stock markets, in particular the dissemination of price-sensitive information on these markets. In order to evaluate the legal rules governing the dissemination of information from an economic perspective, an operational framework is needed to assess the current disclosure regulation with respect to allocative efficiency. The book replaces vague legal goals of securities regulation, such as investors' protection, by financial economic concepts, such as market efficiency and market liquidity. To enhance allocative efficiency, the book analyses the relevancy of mandatory disclosure rules, the use of trading halts in disseminating information during the opening hours of a stock exchange, the use of selective disclosure and the regulation of insider trading.
This Book was ranked at 19 by Google Books for keyword markets and efficiency.
Book ID of Remedies to Informational Asymmetries in Stock Markets's Books is GnoUNMFtGr0C, Book which was written byPeter-Jan Engelenhave ETAG "BGMKiLIJMvM"
Book which was published by Intersentia nv since 2005 have ISBNs, ISBN 13 Code is 9789050954846 and ISBN 10 Code is 9050954847
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