Market Manipulation: A Survey
Tālis J. Putniņš
University of Technology, Sydney - UTS Business School; Stockholm School of Economics in Riga; Financial Research Network (FIRN)
April 8, 2011
Journal of Economic Surveys, Forthcoming
Despite the significant attention that market manipulation has received in recent years many aspects of it are poorly understood. This article identifies from the theoretical and empirical literature what we do and do not know about market manipulation, and suggests directions for future research. We know that manipulation is possible and that it occurs in a wide variety of markets and circumstances. In contrast, we know little about how often manipulation occurs, its effects and how it responds to regulation. Suggested approaches for future research on these issues include: (i) collecting more comprehensive datasets of manipulation cases; (ii) using detection controlled estimation methods to overcome sample selection and partial observability problems; and (iii) conducting controlled experiments. This article also constructs a novel and broad taxonomy of the different types of market manipulation and discusses approaches to defining manipulation.
Number of Pages in PDF File: 30
Keywords: market manipulation, regulation, survey
JEL Classification: G14, G18, K22, K42Accepted Paper Series
Date posted: April 12, 2011
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