摘要
This paper studies the trading behavior of an irrational insider and its influence on the market equilibrium in the presence of market regulation.We find that the market with only one insider with private information is almost close to a strong efficient market,under the condition of market regulation.In the equilibrium,the probability of the insider being caught trading with private information is zero,which shows that the reasonable behavior of the regulator is to essentially give up regulation.But the market efficiency and the irrational trader’s trading intensity all greatly improve because of the existence of the market regulation.
基金
supported by the National Natural Science Foundation of China (No. 11971097, 11201060,11126107)
Fundamental Research Funds for Central Universities
the financial support from the General Project of Science and Technology Plan of Beijing Municipal Commission of Education (No. KM202010017001)
