Insiders-Outsiders, Transparency and the Value of the Ticker

43 Pages Posted: 12 Jun 2008

See all articles by Giovanni Cespa

Giovanni Cespa

Cass Business School; Centre for Economic Policy Research (CEPR)

Thierry Foucault

HEC Paris - Finance Department

Multiple version iconThere are 2 versions of this paper

Date Written: April 2008


We consider a multi-period rational expectations model in which risk-averse investors differ in their information on past transaction prices (the ticker). Some investors (insiders) observe prices in real-time whereas other investors (outsiders) observe prices with a delay. As prices are informative about the asset payoff, insiders get a strictly larger expected utility than outsiders. Yet, information acquisition by one investor exerts a negative externality on other investors. Thus, investors' average welfare is maximal when access to price information is rationed. We show that a market for price information can implement the fraction of insiders that maximizes investors' average welfare. This market features a high price to curb excessive acquisition of ticker information. We also show that informational efficiency is greater when the dissemination of ticker information is broader and more timely.

Keywords: Hirshleifer effect, Market data sales, Price discovery, Transparency

JEL Classification: G10, G14

Suggested Citation

Cespa, Giovanni and Foucault, Thierry, Insiders-Outsiders, Transparency and the Value of the Ticker (April 2008). , Vol. , pp. -, 2008. Available at SSRN:

Giovanni Cespa (Contact Author)

Cass Business School ( email )

106, Bunhill Row
London, EC1Y 8TZ
Great Britain
+44(0)2040708704 (Phone)

Centre for Economic Policy Research (CEPR)

United Kingdom

Thierry Foucault

HEC Paris - Finance Department ( email )

1 rue de la Liberation
Jouy-en-Josas Cedex, 78351
(33)139679569 (Phone)
(33)139677085 (Fax)


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