Banerjee, Snehal; Graveline, Jeremy J. - In: Journal of Financial Economics 111 (2014) 3, pp. 589-608
Regulatory restrictions and market frictions can constrain the aggregate quantity of long and short positions in a security. When these constraints bind, we refer to the security as scarce, and its price becomes distorted relative to its value in a frictionless market. We show that an otherwise...
