Abstract
We deny that asymmetrical information is a market failure. In order to make this case, we subject to critical scrutiny the strongest case for this thesis: the view that laws prohibiting insider trading are viable, necessary, or compatible with the rule of law.
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Notes
Other than, whichever maximizes profits with a greater likelihood, from the businessman’s point of view.
This is a quote from Michael Dooley, quoted in Bainbridge’s introduction to the insider trading volume of Manne’s collective works. Dooley (1999).
It is very difficult to determine who knew what when.
They also exist under socialism. See Mises (1922).
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Smith, T., Block, W.E. The Economics of Insider Trading: A Free Market Perspective. J Bus Ethics 139, 47–53 (2016). https://doi.org/10.1007/s10551-015-2621-5
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DOI: https://doi.org/10.1007/s10551-015-2621-5