The Anniversary Fund of the Austrian National Bank (OeNB) has awarded a substantial grant to an MCI project within the framework of its economic focus on "Financial Markets and Financial Market Stability". Led by the principal researcher, MCI professor PD. Dr. Thomas Stöckl, the project has now been successfully completed after three years. Based on laboratory experiments, various aspects of insider trading legislation were examined in several consecutive studies. In contrast to empirical studies, the chosen research method enables the creation of a neutral starting position and the simulation of markets in which differently informed traders operate. This procedure enables the researchers to observe market outcomes, the behavior of traders, and the impact of their behavior on the markets. The projects aimed to gain new insights to derive recommendations for action for market participants, legislators, and supervisory bodies. Thereby, it contributes to a better understanding of an optimal regulation of financial market mechanisms in connection with insider trading.
During these three years, a total of four research papers originated from the project, two of which have already been accepted for publication. In the first paper, Dominik Schmidt and Thomas Stöckl review the literature on experimental markets with traders who have access to different information. The paper will appear in the “Handbook of Experimental Finance” and can already be read on SSRN. The second paper, written in collaboration with Robert Merl and Stefan Palan from the University of Graz, has just been accepted for publication in the prestigious "Journal of Banking and Finance" and will be published shortly. This paper examines how the interaction of two regulations affects markets and trader behavior. In addition to insider trading legislation, the second regulation examined is the restriction on short selling. This paper can also be read as a working paper on SSRN.
As a qualified economist, Thomas Stöckl focuses on experimental financial market research and can refer to numerous relevant publications. Since July 2018, he has headed the English-language Bachelor's program in Business & Management at the MCI.
OeNB Anniversary Fund
The Oesterreichische Nationalbank (OeNB) has a long tradition of promoting research. Through its Anniversary Fund, it supports outstanding scientific work in defined fields of study. In addition, the OeNB sponsors many grants and awards
Impact of insider trading legislation on markets and traders, © Pixabay
Merl, Robert and Stöckl, Thomas and Palan, Stefan, Insider trading regulation and shorting constraints. Evaluating the joint effects of two market interventions. (July 20, 2021). Available at SSRN: https://ssrn.com/abstract=3890173 or http://dx.doi.org/10.2139/ssrn.3890173
Schmidt, Dominik and Stöckl, Thomas, Asset Market Experiments with Diverse Information (October 22, 2021). HANDBOOK OF EXPERIMENTAL FINANCE, Sascha Füllbrunn and Ernan Haruvy (eds), Edward Elgar Publishing, Forthcoming, Available at SSRN: https://ssrn.com/abstract=3947626 or http://dx.doi.org/10.2139/ssrn.3947626