Temin, Peter; Voth, Hans-Joachim - In: American Economic Review 94 (2004) 5, pp. 1654-1668
This paper presents a case study of a well-informed investor in the South Sea bubble. We argue that Hoare's Bank, a fledgling West End London bank, knew that a bubble was in progress and nonetheless invested in the stock: it was profitable to "ride the bubble." Using a unique dataset on daily...