Inside trading, public disclosure and imperfect competition

Article history: Received 8 October 2011 Received in revised form 12 March 2012 Accepted 14 March 2012 Available online 23 March 2012 We present a multi-period trading model in the style of Kyle's (1985) inside trading model, by assuming that there are at least two insiders in the market with long-lived private information, under the requirement that each insider publicly disclose his stock trades after the fact. The influences of “public disclosure” and “competition among insiders” on the trading behaviors of insiders and the market are studied. Moreover, we give the exact speed of the revelation of the private information, and show that all information is revealed immediately and the market depth goes to infinity immediately as trading happens infinitely frequently. © 2012 Elsevier Inc. All rights reserved. JEL classifications: G14 G12