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We apply the theory of McKean-Vlasov-type SDEs to study several problems related to market efficiency in the context of partial information and partially observable financial markets: (i) convergence of reduced-information market price…

Mathematical Finance · Quantitative Finance 2025-11-05 Karen Grigorian , Robert Jarrow

Motivated by continuous-time optimal inventory management, we study a class of stationary mean-field control problems with singular controls. The dynamics are modeled by a mean-reverting Ornstein-Uhlenbeck process, and the performance…

Optimization and Control · Mathematics 2026-02-02 Federico Cannerozzi

We extend the closed-form privacy-subsidy result of Nakamura~(2026, arXiv:2605.15746) from the single-period Kyle model to continuous-time. A committed Bayesian automated market maker observes the aggregate order flow perturbed by an…

Computer Science and Game Theory · Computer Science 2026-05-28 Yuki Nakamura

This paper studies the dynamic pricing mechanism for data products in demand-driven markets through a game-theoretic framework. We develop a three-tier Stackelberg game model to capture the hierarchical strategic interactions among key…

Optimization and Control · Mathematics 2025-12-29 Lijun Bo , Dongfang Yang , Shihua Wang

When prices reflect all available information, they oscillate around an equilibrium level. This oscillation is the result of the temporary market impact caused by waves of buyers and sellers. This price behavior can be approximated through…

Trading and Market Microstructure · Quantitative Finance 2020-03-25 Alexander Lipton , Marcos Lopez de Prado

Mathematical models, calibrated to data, have become ubiquitous to make key decision processes in modern quantitative finance. In this work, we propose a novel framework for data-driven model selection by integrating a classical…

Computational Finance · Quantitative Finance 2020-06-04 Imanol Perez Arribas , Cristopher Salvi , Lukasz Szpruch

The large integration of variable energy resources is expected to shift a large part of the energy exchanges closer to real-time, where more accurate forecasts are available. In this context, the short-term electricity markets and in…

Trading and Market Microstructure · Quantitative Finance 2020-04-14 Ioannis Boukas , Damien Ernst , Thibaut Théate , Adrien Bolland , Alexandre Huynen , Martin Buchwald , Christelle Wynants , Bertrand Cornélusse

In this paper, we consider the pricing and hedging of a financial derivative for an insider trader, in a model-independent setting. In particular, we suppose that the insider wants to act in a way which is independent of any modelling…

Mathematical Finance · Quantitative Finance 2020-06-25 Beatrice Acciaio , Alexander M. G. Cox , Martin Huesmann

We construct explicitly a bridge process whose distribution, in its own filtration, is the same as the difference of two independent Poisson processes with the same intensity and its time 1 value satisfies a specific constraint. This…

Probability · Mathematics 2013-01-29 Umut Çetin , Hao Xing

In this work, we study an equilibrium-based continuous asset pricing problem which seeks to form a price process endogenously by requiring it to balance the flow of sales-and-purchase orders in the exchange market, where a large number of…

Mathematical Finance · Quantitative Finance 2021-09-28 Masaaki Fujii , Akihiko Takahashi

We establish connections between optimal transport theory and the dynamic version of the Kyle model, including new characterizations of informed trading profits via conjugate duality and Monge-Kantorovich duality. We use these connections…

Trading and Market Microstructure · Quantitative Finance 2021-08-13 Kerry Back , Francois Cocquemas , Ibrahim Ekren , Abraham Lioui

We investigate a Kyle model under Gaussian assumptions where a risk-averse informed trader has imperfect information on the fundamental price of an asset. We show that an equilibrium can be constructed by considering an optimal transport…

Trading and Market Microstructure · Quantitative Finance 2025-01-29 Reda Chhaibi , Ibrahim Ekren , Eunjung Noh

One attractive approach to market dynamics is the level $k$ model in which a level $0$ player adopts a very simple response to current conditions, a level $1$ player best-responds to a model in which others take level $0$ actions, and so…

Computer Science and Game Theory · Computer Science 2016-05-31 Krishnamurthy Dvijotham , Yuval Rabani , Leonard J. Schulman

The price of a financial derivative can be expressed as an iterated conditional expectation, where the inner term conditions on the future of an auxiliary process. We show that this inner conditional expectation solves an SPDE (a…

Mathematical Finance · Quantitative Finance 2026-02-11 Kaustav Das , Ivan Guo , Grégoire Loeper

The research paper empirically investigates several machine learning algorithms to forecast stock prices depending on insider trading information. Insider trading offers special insights into market sentiment, pointing to upcoming changes…

Machine Learning · Computer Science 2025-07-08 Amitabh Chakravorty , Nelly Elsayed

In the dynamic discrete-time trading setting of Kyle (1985), we prove that Kyle's equilibrium model is stable when there are one or two trading times. For three or more trading times, we prove that Kyle's equilibrium is not stable. These…

Trading and Market Microstructure · Quantitative Finance 2023-07-27 Umut Cetin , Kasper Larsen

We compare the predictions of the stationary Kyle model, a microfounded multi-step linear price impact model in which market prices forecast fundamentals through information encoded in the order flow, with those of the propagator model, a…

Trading and Market Microstructure · Quantitative Finance 2021-12-10 Michele Vodret , Iacopo Mastromatteo , Bence Tóth , Michael Benzaquen

This paper investigates a class of unified stochastic linear quadratic Gaussian (LQG) social optima problems involving a large number of weakly-coupled interactive agents under a {generalized} setting. For each individual agent, the control…

Optimization and Control · Mathematics 2020-05-15 Zhenghong Qiu , Jianhui Huang , Tinghan Xie

We consider an optimal transport problem with backward martingale constraint. The objective function is given by the scalar product of a pseudo-Euclidean space $S$. We show that the supremums over maps and plans coincide, provided that the…

Probability · Mathematics 2024-05-30 Dmitry Kramkov , Mihai Sîrbu

Deep Equilibrium Models (DEQs) have emerged as a powerful paradigm in deep learning, offering the ability to model infinite-depth networks with constant memory usage. However, DEQs incur significant inference latency due to the iterative…

Machine Learning · Computer Science 2026-02-04 Junchao Lin , Zenan Ling , Jingwen Xu , Robert C. Qiu