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Information Journal Paper

Title

Investigating the effect of increasing the transacting probability of informed traders on adverse selection of market maker

Pages

  125-136

Abstract

 One of the common methods of increase in liquidity and reduction of volatility of share price is usage marketing maker mechanism in financial markets. Marketing maker is a professional activity and Market Makers should have enough knowledge and specialty until they can act correctly. Market Maker play important role in capital market and increase in liquidity is the most important of them and Market Maker should make sure that there are supply and demand for desired securities. Despite the importance of the presence of the Market Makers in the world stock markets, it seems that don’ t pay attention to this important institution in capital market and their role is neglected. In this research, paid to check problems of Market Maker decision making according to presence of informed and unInformed Traders and by using Game theory and Bayesian balance will pay to create and simulate model for reducing adverse selection of Market Makers. In this research will pay to check increase the transacting probability of informed trader and effect on adverse selection of Market Makers. Results show that increase the transacting probability of informed trader reduces adverse selection of Market Makers.

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  • Cite

    APA: Copy

    SHAHAB LAVASANI, KEYVAN, & Morshed Babaie, Sadaf. (2020). Investigating the effect of increasing the transacting probability of informed traders on adverse selection of market maker. FINANCIAL KNOWLEDGE OF SECURITY ANALYSIS (FINANCIAL STUDIES), 13(46 ), 125-136. SID. https://sid.ir/paper/950996/en

    Vancouver: Copy

    SHAHAB LAVASANI KEYVAN, Morshed Babaie Sadaf. Investigating the effect of increasing the transacting probability of informed traders on adverse selection of market maker. FINANCIAL KNOWLEDGE OF SECURITY ANALYSIS (FINANCIAL STUDIES)[Internet]. 2020;13(46 ):125-136. Available from: https://sid.ir/paper/950996/en

    IEEE: Copy

    KEYVAN SHAHAB LAVASANI, and Sadaf Morshed Babaie, “Investigating the effect of increasing the transacting probability of informed traders on adverse selection of market maker,” FINANCIAL KNOWLEDGE OF SECURITY ANALYSIS (FINANCIAL STUDIES), vol. 13, no. 46 , pp. 125–136, 2020, [Online]. Available: https://sid.ir/paper/950996/en

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