Cheng, Po-Keng; Kim, Young Shin - In: Cogent Economics & Finance 5 (2017) 1, pp. 1-28
dominate the market when they are more willing than positive-feedback traders to take risks. In addition, more crises occur as … positive-feedback traders face higher funding costs compared to fundamentalists. Our model suggests that fundamentalists cause … heavier tails, and positive-feedback traders cause the formation of speculative bubbles. Our model also indicates that traders …