Back to Search
Start Over
Incentive-compatible contracts for the sale information
- Publication Year :
- 2002
- Publisher :
- Oxford University Press, 2002.
-
Abstract
- An informed financial institution can trade on private information and also sell it to clients through a managed fund. To provide an incentive for the informed agent to trade in the interest of her client, the optimal contract requires that she be compensated as an increasing function of the profits of the fund. The optimal contract is also designed to limit the aggressiveness of the sum of the fund's trade and the proprieatary trade. This reduces information revelation and thes leads to greater overall trading profits than if the informed agent only conducted proprietary trades.
- Subjects :
- Financial markets
Incentive
Finance
Analysis
Subjects
Details
- Language :
- English
- Database :
- OpenAIRE
- Accession number :
- edsair.dedup.wf.001..c4e03fd209365941d5e1ac690f449995