v9n9: Evans on Smith and Block on Insider TradingPosted: December 28, 2021
“Insider Trading and Sabotage,” by Anthony Evans
A COMMENTARY ON T. L. Smith and W. E. Block (2016*), “The Economics of Insider Trading: A Free Market Perspective,” J Bus Ethics 139(1): 47–53.
Insider trading is widely reviled, and yet – as Smith and Block argue – it is consistent with the basic principles of a free market system. This article draws attention to an argument against insider trading that Smith and Block don’t address, namely the potential for sabotage. However, this issue still fails to justify insider-trading legislation, and thus ultimately supports Smith and Block’s view that regulatory attempts to prevent it are misplaced.
To download the full PDF, click here: Evans on Smith & Block
Anthony J. Evans is Professor of Economics at ESCP Business School. He has been an Affiliate Faculty Member on the Microeconomics of Competitiveness Programme at Harvard Business School, and was a Fulbright Scholar-in-Residence at San Jose State University.
* Editorial note: This target article is outside Business Ethics Journal Review’s usual three-year window for Commentaries. That is due to editorial mishandling of the author’s original submission, which was accomplished within the three-year window. The Editors apologize to the author for the error.