Proof of the Existence of Speculative Equilibria

The existence of speculative equilibria is proven in a simple overlapping generations, infinite horizon economy. In equilibrium, all agents bid assets according to increasing functions of private information which is uncorrelated with the fundamental value (dividend stream) of the asset. This is a unique best response to the strategies of the other agents, which implies that speculative information is valuable.

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Year of publication:	1992-08
Authors:	Jackson, Matthew O.
Institutions:	Center for Mathematical Studies in Economics and Management Science (CMS-EMS), Kellogg Graduate School of Management

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Extent:	application/pdf
Series:	Discussion Papers.
Type of publication:	Book / Working Paper
Notes:	Number 1003
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005588411