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December 10, 2009 | History

Private sunspots and idiosyncratic investor sentiment 1 edition

Private sunspots and idiosyncratic investor sentiment
Marios Angeletos

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Private sunspots and idiosyncratic investor sentiment
George-Marios Angeletos.

Published 2008 by National Bureau of Economic Research in Cambridge, MA .
Written in English.

About the Book

"This paper shows how rational investors can have different degrees of optimism regarding the prospects of the economy, even if they share exactly the same information regarding all economic fundamentals. The key is that heterogeneity in expectations regarding endogenous outcomes can emerge as a purely self-fulfilling equilibrium property when investment choices are strategic complements. This in turn has interesting novel positive and normative implications for a wide class of models that feature such complementarities: (i) It can rationalize idiosyncratic investor sentiment. (ii) It can be the source of significant heterogeneity in real and financial investment choices, even in the absence of any heterogeneity in individual characteristics and despite the presence of a strong incentive to coordinate on the same course of action. (iii) It can sustain rich fluctuations in aggregate investment and asset prices, including fluctuations that are smoother than those often associated with multiple-equilibria models. (iv) It can capture the idea that investors learn slowly how to coordinate on a certain course of action. (v) It can boost welfare. (vi) It can render apparent coordination failures evidence of improved efficiency"--National Bureau of Economic Research web site.

Edition Notes

Title from PDF file as viewed on 7/10/2008.

Includes bibliographical references.

Also available in print.

System requirements: Adobe Acrobat Reader.

Mode of access: World Wide Web.

Series
NBER working paper series -- working paper 14015, Working paper series (National Bureau of Economic Research : Online) -- working paper no. 14015.

Classifications

Library of Congress
HB1

The Physical Object

Format
Electronic resource

ID Numbers

Open Library
OL17087971M
LC Control Number
2008610853

History Created December 10, 2009 · 1 revision Download catalog record: RDF / JSON

December 10, 2009 Created by WorkBot add works page