Journal of Finance Vol. 48 No. 4 1993
Brokerage Commission Schedules
open access
Abstract
It is generally optimal for risk‐sharing reasons to base a charge for information on the signal realization. When this is not possible, a charge based on the amount of trading, a brokerage commission, may be a good alternative. The optimal brokerage commission schedule is derived for a risk‐neutral information seller faced with risk‐averse purchasers who may differ in their risk aversion. Revenues from the brokerage commission are compared with those from a fixed charge for information and the optimal mutual fund management fee.
- DOI
- 10.1111/j.1540-6261.1993.tb04758.x
- Volume
- 48
- Issue
- 4
- Pages
- 1379-1402
- Language
- en
- Sources
- crossref openalex