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We study insider trading in a dynamic setting. but uninformed, traders choose between projects with different levels insider trading. Insider trading distorts investment assets with less private information. , when investment is sufficiently elastic, insider trading can welfare-enhancing because of more informative. When insiders repeatedly receive information, trade to reveal it when investment information elastic because good news investment and hence future insider. Thus, more information is revealed and agents are exploited lessfrequently insiders. Both effects are Pareto-improving. , we consider various insider-trading regulations.
Bernhardt et al. (Sat,) studied this question.
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