About this document
Understanding Asset Bubbles and Crashes by Camilo Bastias Benzi is a document available to read on EtoBox.
The document discusses a model where rational arbitrageurs are unable to coordinate their selling strategies, allowing an asset bubble to persist despite their presence. The model formalizes how dispersion of opinions among arbitrageurs and the need for coordination can result in bubbles surviving. It also examines how arbitrageurs face a tradeoff between exiting the bubble early for profits versus trying to time the market and exit right before it crashes.
- Author
- Camilo Bastias Benzi
- Language
- EN