Imperfect competition among informed traders

We analyze competition among informed traders in the continuous-time Kyle ( 1985) model, as Foster and Viswanathan (1996) do in discrete time. We expli citly describe the unique linear equilibrium when signals are imperfectly c orrelated and confirm the conjecture of Holden and Subrahmanyam (1992) that there is no linear equilibrium when signals are perfectly correlated. One result is that at some date, and at all dates thereafter, the market would have buen more informationally efficient had there been a monopolist inform ed trader instead of competing traders. The relatively large amount of priv ate information remaining. near the end of trading causes the market to app roach complete illiquidity.