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S. J. Grossman, “Further Results on the Informational Efficiency of Competitive Stock Markets,” Journal of Economic Theory, Vol. 18, No. 1, 1978, pp. 81-101. doi:10.1016/0022-0531(78)90043-1

has been cited by the following article:

• TITLE: On Information Creation and Its Effect in Incomplete Financial Markets

  AUTHORS: Mingren Chen

  KEYWORDS: Incomplete Financial Markets; Information Creation; Negative Effects; Positive Effects

  JOURNAL NAME: Technology and Investment, Vol.3 No.3, August 31, 2012

  ABSTRACT: “Thirst for information” existing in financial markets shows that information supply is insufficient and private information is value. Agents will select to acquire economic information under the market incentive mechanism. This is the basis of information creation in incomplete financial markets. Because the information supplies insufficiency in the financial markets is exogenous, information creation is natural exogenous. From this perspective, this paper thinks that information creation has a practical base and a very important significance in financial economic field. The effect of information creation has dual character: the one is positive effect, which should improve market efficiency in long term; the other is negative effects, which should aggravate the market speculation and manipulation, cause financial bubble, and amplify financial risk in short term.