Ambiguity in markets: a test in an Australian emissions market

Deborah Cotton

Research output: Contribution to journalMeeting abstract


The detrimental effect of ambiguity to the efficiency of financial markets has been discussed and written about by academics and practitioners since at least the early 1990’s. This paper tests the hypothesis that information reduces the ambiguity surrounding investor participation in Australia’s largest emissions trading scheme. This market was chosen due to the high level of ambiguity surrounding Government policy and the ability to determine the factors likely to reduce ambiguity. We find that information does reduce ambiguity as shown by reduced bid ask spreads, increased relative trading volume and an increased number of trades.
Original languageEnglish
Pages (from-to)22-23
Number of pages2
JournalExpo 2012 Higher Degree Research : book of abstracts
Publication statusPublished - 2012
EventHigher Degree Research Expo (8th : 2012) - Sydney
Duration: 12 Nov 201213 Nov 2012


  • climate change
  • ambiguity
  • market efficiency


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