Purpose – The paper aims to test the rational-expectations hypothesis using data from the Chinese stock market. Design/methodology/approach – The rational-expectations hypothesis plays a critical role in economic and financial studies. However, it is unclear whether this hypothesis is...

This paper introduces uncertainty regarding the proportion of informed traders in a rational expectation equilibrium model with asymmetric information. The proportion uncertainty dramatically changes the properties of the resulting equilibrium. First, it may generate multiple nonlinear rational...

Purpose – The paper aims to test the rational-expectations hypothesis using data from the Chinese stock market. Design/methodology/approach – The rational-expectations hypothesis plays a critical role in economic and financial studies. However, it is unclear whether this hypothesis is...

Using data from China's individual health-insurance market, we study the problem of information asymmetry. Our preliminary results appear to contradict standard-model predictions, showing that higher-risk buyers are more likely to purchase "additional" insurance than lower-risk buyers, but that...