This paper examines how the security research affects the trader's investment decision in the financial market and whether the equilibrium is the stability of the equilibrium in dynamic security research model. We find that (a) an increase in precision of private information will lead to increase in precision of individual total information and individual assessment of the risky asset return; (b) individual demand for risky asset is positively correlated with the precision of individual total information, individual assessment of the risky return and precision of individual private information; (c) an increase in the precision of individual private information leads to traders increasing their wealth at date 2. (d) If the equilibrium is stable in dynamic security research model; it means no trader is at least as strong as the others combined in chance of earning the profit from security research activity.
