Whoever Has Will Be Given More: Information Sharing in Financial Markets


Date & Time:August 26, 2020   10:00- 11:30am

Venue:Virtual Seminar


                    Meeting ID314 133 633

Speaker:Liyan Yang(University of Toronto


This paper studies information sharing between strategic investors with private information of different precision about the asset fundamental. We find that a coarsely informed investor would always share her information ”as is'' if her counterparty investor is well informed about the fundamental. In this way, the coarsely informed investor invites the well informed investor to trade against her information, thereby offsetting her informed order flow and reducing the price impact. The coarsely informed investor gains from the information sharing but the well informed investor loses from it. Our model offers an explanation for why the masses of investors express investment opinions on social media and sheds new light on information networks in financial markets and institutional investors' sentiment trading strategy.

Speaker Biography: 

Liyan Yang is a Professor of Finance, PhD Area Coordinator of Finance Area and Peter L. Mitchelson/SIT Investment Associates Foundation Chair in Investment Strategy at the Rotman School of Management, University of Toronto. His research interests are in financial markets, asset pricing, and behavioral finance. He received PhD in economics from Cornell University in 2010. He is currently serving as an associate editor at Journal of Economic Theory, Journal of Finance, Journal of Financial Markets, and Management Science. His research has appeared in Journal of Economic Theory, Journal of Financial Economics, Journal of Finance, and Review of Financial Studies, etc. Yang has received the 2016 JFQA William F. Sharpe Award for Scholarship in Financial Research, the 2016 Bank of Canada’s Governor’s Award, and the 2015 Roger Martin Award for Excellence in Research, among others..