Siddiqi, Hammad (2007): Stock Price Manipulation: The Role of Intermediaries.
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We model stock price manipulation when the manipulator is in the role of an intermediary (broker). We find that in the absence of superior information, the broker can manipulate equilibrium outcomes without losing credibility with respect to accurate forecasting. This result extends to the case when the broker prefers more investment to come into the market. However, when competition among brokers is introduced then the investors get their favorite outcome in the absence of superior information. This result has important implications for encouraging broker competitions in developing markets. Many developing markets are still not demutualized; hence broker level competition is limited in such markets.
|Item Type:||MPRA Paper|
|Original Title:||Stock Price Manipulation: The Role of Intermediaries|
|Keywords:||Stock Price Manipulation, Broker Manipulation, Broker Competition, Broker Bias, Emerging Markets, Market Microstructure|
|Subjects:||G - Financial Economics > G1 - General Financial Markets
G - Financial Economics > G2 - Financial Institutions and Services
G - Financial Economics > G3 - Corporate Finance and Governance
|Depositing User:||Hammad Siddiqi|
|Date Deposited:||18. Dec 2007 22:52|
|Last Modified:||13. Feb 2013 16:54|
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