Strategic trading when some investors receive information before others

This paper examines trading and price behavior when some investors receive information before others. It shows that early-informed investors trade more intensely on the information they share with late-informed investors at first to exploit it before the latter can do so. They reverse their trading strategy in the second round. The paper also shows that price and price moves are positively correlated with information. More interestingly, it discovers that under some conditions, subsequent price changes are positively correlated. Finally, it shows that early-informed investors may behave like contrarians.