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Disagreement-Based Trading and Speculation: Implications for Financial Regulation and Economic Theory

Author

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  • Yuri Biondi

    (PREG-CRG - Pole de recherche en économie et gestion - X - École polytechnique - IP Paris - Institut Polytechnique de Paris - CNRS - Centre National de la Recherche Scientifique)

Abstract

Lynn Stout's paper develops an insightful legal-economic analysis of speculative trading. From one hand, the paper discusses the legal-economic framework of speculation and its recent transformation, making reference to the case of derivatives markets crash (and related financial crisis) of 2007. From another hand, the paper foreshadows a thought-provoking economic model of trade (and speculation) based on disagreement, advocating further developments that take into account market manipulation and conflict of interest, whilst relaxing alleged assumptions (and beliefs) on universal fundamental value and perfect forecasting.

Suggested Citation

  • Yuri Biondi, 2011. "Disagreement-Based Trading and Speculation: Implications for Financial Regulation and Economic Theory," Post-Print hal-00561904, HAL.
    • Handle: RePEc:hal:journl:hal-00561904
    Note: View the original document on HAL open archive server: https://hal.science/hal-00561904
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    Citations

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    Cited by:

    1. Stout Lynn A., 2012. "New Thinking on "Shareholder Primacy"," Accounting, Economics, and Law: A Convivium, De Gruyter, vol. 2(2), pages 1-24, June.
    2. Stout, Lynn & Library, Cornell, 2018. "New Thinking on "Shareholder Primacy"," LawArXiv fn2gu, Center for Open Science.
    3. Biondi Yuri, 2019. "Equilibrium and System Analysis in Economic Dynamics," Accounting, Economics, and Law: A Convivium, De Gruyter, vol. 9(3), pages 1-10, December.
    4. Biondi Yuri, 2011. "The Pure Logic of Accounting: A Critique of the Fair Value Revolution," Accounting, Economics, and Law: A Convivium, De Gruyter, vol. 1(1), pages 1-49, January.
    5. Bavoso Vincenzo, 2017. "“High Quality Securitisation and EU Capital Markets Union – Is it Possible?”," Accounting, Economics, and Law: A Convivium, De Gruyter, vol. 7(3), pages 1-29, December.
    6. Brivot Marion, 2011. "Trust in Freedom or in Equality? A Comment on Bernard E. Harcourt's The Illusion of Free Markets," Accounting, Economics, and Law: A Convivium, De Gruyter, vol. 1(2), pages 1-10, November.
    7. Biondi, Yuri & Giannoccolo, Pierpaolo & Galam, Serge, 2012. "Formation of share market prices under heterogeneous beliefs and common knowledge," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 391(22), pages 5532-5545.
    8. Yuri Biondi & Pierpaolo Giannoccolo, 2015. "Share price formation, market exuberance and financial stability under alternative accounting regimes," Journal of Economic Interaction and Coordination, Springer;Society for Economic Science with Heterogeneous Interacting Agents, vol. 10(2), pages 333-362, October.
    9. Yuri Biondi & Simone Righi, 2013. "What does the financial market pricing do? A simulation analysis with a view to systemic volatility, exuberance and vagary," Papers 1312.7460, arXiv.org.
    10. Fantacci Luca, 2013. "Why Banks Do What They Do. How the Monetary System Affects Banking Activity," Accounting, Economics, and Law: A Convivium, De Gruyter, vol. 3(3), pages 333-356, November.

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