Rahi, Rohit; Marín, José M. - In: Economic Theory 14 (1999) 3, pp. 653-668
A speculative security is an asset whose payoff depends in part on a random shock uncorrelated with economic fundamentals (a sunspot) about which some traders have superior information. In this paper we show that agents may find it desirable to trade such a security in spite of the fact that it...