Brokerage Commission Schedules
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. Copyright 1993 by American Finance Association.
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Volume (Year): 48 (1993)
Issue (Month): 4 (September)
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