IBADAN JOURNAL OF THE SOCIAL SCIENCES

Ibadan Journal of the Social Sciences
Volume 5, No. 2, 2007
Pages 139-145

DOI: 10.36108/ijss/7002.50.0260

Sellers’ Behaviour in an Informational Efficient Market

Ishola Rufus Akintoye

Department of Economics, University of Ibadan

Abstract

Theoretically, in an informational efficient market, trading activities should have a directorial relationship. Ordinarily, the probability of making high returns should influence sellers to supply more and vice-versa ! (Karpoff, 1987). One of the basic assumptions of this theory is that information is uniformly interpreted and understood by market players (Akintoye and Asaolu 2008; Pandey, 1999). Where the assumption of uniform interpretation is relaxed and there is the possibility of different interpretations of the same information, seller behaviour may not necessarily follow the directorial postulation: but all inverse relationship may result and this could cause different behaviours in the same market (Barron and Karpoff, 2004). This study, therefore, considers the relationship between trading volume (supply) and the precision of public announcement under uniform and different interpretations, It was recommended that every seller should take enough time t0 obtain relevant market information and also to strive to understand the exact meaning of such information through attendance at seminars, conferences, training programmes, and other information media, so as to maximize investment returns.
Keywords: Efficient market, capital market, information efficiency, optimisation, transaction cost, trading volume, interpretation, supply

 

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