ON THE EFFICIENCY OF COMPETITIVE STOCK MARKETS WHERE TRADES HAVE DIVERSE INFORMATION

Authors

  • Sanford Grossman

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    • Department of Economics and Graduate School of Business, Stanford University. I am grateful to Michael Rothschild, Joseph Stiglitz and the participants of the Summer Seminar 1975 at the Institute for Mathematical Studies in the Social Sciences, Stanford University for their helpful comments. This work was supported by National Science Foundation Grant SOC74−11446 at the Institute for Mathematical Studies in the Social Sciences, Stanford University, and the Dean Witter Foundation. Due to space limitations, an Appendix on the subject of the “Uniqueness of Equilibrium” is not included in the article and is available from the author upon request.


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