Opaque trading, Disclosure, and asset prices: Implications for hedge fund regulation

Easley, D; O'Hara, M; Yang, L

Opaque trading, Disclosure, and asset prices: Implications for hedge fund regulation

Easley, D O'Hara, M Yang, L

Permalink

Publication Type:: Journal Article
Citation:: Review of Financial Studies, 2014, 27 (4), pp. 1190 - 1237
Issue Date:: 2014-01-01

Closed Access

	Filename	Description	Size
	ContentServer (24).pdf	Published Version	602.6 kB	Adobe PDF	View/Open

Copyright Clearance Process

Recently Added
In Progress
Closed Access

This item is closed access and not available.

Full metadata record

Field	Value	Language
dc.contributor.author	Easley, D	en_US
dc.contributor.author	O'Hara, M	en_US
dc.contributor.author	Yang, L	en_US
dc.date.issued	2014-01-01	en_US
dc.identifier.citation	Review of Financial Studies, 2014, 27 (4), pp. 1190 - 1237	en_US
dc.identifier.issn	0893-9454	en_US
dc.identifier.uri	http://hdl.handle.net/10453/114864
dc.description.abstract	We investigate the effect of ambiguity about hedge fund investment strategies on asset prices and aggregate welfare. We model some traders (mutual funds) as facing ambiguity about the equilibrium trading strategies of other traders (hedge funds). This ambiguity limits the ability of mutual funds to infer information from prices and has negative effects on market outcomes. We use this analysis to investigate the implications of regulations that affect disclosure requirements of hedge funds or the cost of operating a hedge fund. Our analysis demonstrates how regulations affect asset prices and welfare through their influence on opaque trading. © 2013 The Author 2013. Published by Oxford University Press on behalf of The Society for Financial Studies. All rights reserved. For Permissions, please e-mail: journals.permissions@oup.com.	en_US
dc.relation.ispartof	Review of Financial Studies	en_US
dc.relation.isbasedon	10.1093/rfs/hht079	en_US
dc.subject.classification	Finance	en_US
dc.title	Opaque trading, Disclosure, and asset prices: Implications for hedge fund regulation	en_US
dc.type	Journal Article
utslib.citation.volume	4	en_US
utslib.citation.volume	27	en_US
utslib.for	1502 Banking, Finance and Investment	en_US
utslib.for	1402 Applied Economics	en_US
utslib.for	1401 Economic Theory	en_US
pubs.embargo.period	Not known	en_US
pubs.organisational-group	/University of Technology Sydney
pubs.organisational-group	/University of Technology Sydney/Faculty of Business
utslib.copyright.status	closed_access
pubs.issue	4	en_US
pubs.publication-status	Published	en_US
pubs.volume	27	en_US

Abstract:

We investigate the effect of ambiguity about hedge fund investment strategies on asset prices and aggregate welfare. We model some traders (mutual funds) as facing ambiguity about the equilibrium trading strategies of other traders (hedge funds). This ambiguity limits the ability of mutual funds to infer information from prices and has negative effects on market outcomes. We use this analysis to investigate the implications of regulations that affect disclosure requirements of hedge funds or the cost of operating a hedge fund. Our analysis demonstrates how regulations affect asset prices and welfare through their influence on opaque trading. © 2013 The Author 2013. Published by Oxford University Press on behalf of The Society for Financial Studies. All rights reserved. For Permissions, please e-mail: journals.permissions@oup.com.

Please use this identifier to cite or link to this item:

http://hdl.handle.net/10453/114864