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demand and overturns their expectations, generating a bust. This emphasizes a novel role for imperfect common knowledge …
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The paper presents a two-period Walrasian financial market model composed of informed and uninformed rational investors, and noise traders. The rational investors maximize second period consumption utility from the payoffs of trading risk-free holdings to risky assets in the first period. The...
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informal competition have worse expectations on future sales growth, which in turn are associated with a lower probability of …
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