Coordinated investing with feedback and learning

Publisher:
Elsevier B.V.
Publication Type:
Journal Article
Citation:
Journal of Economic Behavior and Organization, 2008, 65 (2), pp. 202 - 223
Issue Date:
2008-01
Full metadata record
Files in This Item:
Filename Description Size
Thumbnail2006011955.pdf482.96 kB
Adobe PDF
This paper introduces assets for which the intrinsic value is endogenous to the amount of funding attracted. A rational expectations equilibrium is developed. Additionally, simulations of the model based on bounded rationality explore the different market behavior under fundamental and momentum based investing strategies. Both strategies produce herding characteristics. The herding under the fundamental strategy approximates the optimal investing of a rational central planner. The momentum strategy results in suboptimal economic development.
Please use this identifier to cite or link to this item: