Abstract:We study the incentives to acquire information from exclusive news sources versus information from popular sources in a CARA-normal asset market. Each trader is able to observe one of a finite number of news sources. Clustering on the most precise source can happen for two reasons. One is standard: traders do not care that they dilute others' profits by trading on the same information. The other reason is more novel: traders with different information sets may respond to the same news differently -when this is… Show more
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