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Eyster, Erik; Rabin, Matthew - C.E.P.R. Discussion Papers - 2009

In social-learning environments, we investigate implications of the assumption that people naively believe that each previous person's action reflects solely that person's private information, leading them to systematically imitate all predecessors even in the many circumstances where rational...

Persistent link: https://www.econbiz.de/10004969132

Does One Soros Make a Difference? A Theory of Currency Crises with Large and Small Traders

Corsetti, Giancarlo; Dasgupta, Amil; Morris, Stephen; … - C.E.P.R. Discussion Papers - 2000

Do large investors increase the vulnerability of a country to speculative attacks in the foreign exchange markets? To address this issue, we build a model of currency crises where a single large investor and a continuum of small investors independently decide whether to attack a currency based...

Persistent link: https://www.econbiz.de/10005791850

Too Many to Fail - An Analysis of Time Inconsistency in Bank Closure Policies

Acharya, Viral V; Yorulmazer, Tanju - C.E.P.R. Discussion Papers - 2004

This Paper shows that bank closure policies suffer from a ‘too-many-to-fail’ problem: when the number of bank failures is large, the regulator finds it ex-post optimal to bail out some or all failed banks, whereas when the number of bank failures is small, failed banks can be acquired by the...

Persistent link: https://www.econbiz.de/10005136753

Social Learning in Continuous Time: When are Informational Cascades More Likely to be Inefficient?

Pastine, Tuvana - C.E.P.R. Discussion Papers - 2005

probability of inefficient herding. The analysis also suggests that markets with quick response to investment decisions, such as …

Persistent link: https://www.econbiz.de/10005497758

Information Contagion and Inter-Bank Correlation in a Theory of Systemic Risk

Acharya, Viral V; Yorulmazer, Tanju - C.E.P.R. Discussion Papers - 2003

depositors of a failed bank can migrate to the surviving bank, then herding incentives are partially mitigated and this gives … localized nature of contagion and herding, and the welfare properties, are also characterized. …

Persistent link: https://www.econbiz.de/10005504423

Cash-in-the-Market Pricing and Optimal Bank Bailout Policy

Acharya, Viral V; Yorulmazer, Tanju - C.E.P.R. Discussion Papers - 2005

As the number of bank failures increases, the set of assets available for acquisition by the surviving banks enlarges but the total amount of available liquidity within the surviving banks falls. This results in ‘cash-in-the-market’ pricing for liquidation of banking assets. At a...

Persistent link: https://www.econbiz.de/10005114225

Market Stress and Herding

Hwang, Soosung; Salmon, Mark - C.E.P.R. Discussion Papers - 2004

We propose a new approach to detecting and measuring herding which is based on the cross-sectional dispersion of the … factor sensitivity of assets within a given market. This method enables us to evaluate if there is herding towards particular … sectors or styles in the market including the market index itself and critically we can also separate such herding from common …

Persistent link: https://www.econbiz.de/10005656282

Herding With and Without Payoff Externalities - An Internet Experiment

Drehmann, Mathias; Oechssler, Jörg; Roider, Andreas - C.E.P.R. Discussion Papers - 2005

Most real world situations that are susceptible to herding are also characterized by direct payoff externalities. Yet …, the bulk of the theoretical and experimental literature on herding has focused on pure informational externalities. In … effects, first-mover advantage, etc.) in a standard information-based herding model. Our results are based on an internet …

Persistent link: https://www.econbiz.de/10005656329

Signal Accuracy and Informational Cascades

Pastine, Ivan; Pastine, Tuvana - C.E.P.R. Discussion Papers - 2005

predecessors even when their own signal suggests the opposite. This herding behaviour may lead the society to an inefficient … to a decline in the probability of inefficient herding, because the first movers are more likely to make the correct …

Persistent link: https://www.econbiz.de/10005656436

Electoral politics and regional development: assessing the geographical allocation of public investment in Turkey

Luca, Davide; Rodriguez-Pose, Andres - C.E.P.R. Discussion Papers - 2014

distribution of public investment in the 81 provinces of Turkey between 2004 and 2012. Our results show that, although electoral …

Persistent link: https://www.econbiz.de/10011083396