Irrational Exuberance, Entrepreneurial Finance and Public Policy
Unrealistic optimism is a well documented phenomenon. This paper argues that it is important in many economic contexts. Focusing on start-up finance for businesses, optimism may be responsible for or consistent with features such as credit rationing or redlining that are normally taken as symptoms of under-provision of finance requiring intervention to expand lending. Optimism leads to the opposite conclusion, at least if it is legitimate to use fiscal policy to counteract systematic error. The paper reports on an experiment in which, due to optimism, the lower the prizes to entrepreneurial activity the higher the subject's expected income.
Year of publication: |
2004
|
---|---|
Authors: | Coelho, Marta ; Meza, David de ; Reyniers, Diane |
Published in: |
International Tax and Public Finance. - Springer, ISSN 0927-5940. - Vol. 11.2004, 4, p. 391-417
|
Publisher: |
Springer |
Saved in:
freely available
Saved in favorites
Similar items by person
-
Irrational exuberance, entrepreneurial finance and public policy
Coelho, Marta, (2004)
-
Irrational Exuberance : Entrepreneurial Finance and Public Policy
Coelho, Marta, (2004)
-
Do bad risks know it? : experimental evidence on optimism and adverse selection
Coelho, Marta, (2012)
- More ...