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The rationality of investors during asset price bubbles has been the subject of considerable debate. An analysis of the …
Persistent link: https://www.econbiz.de/10013031024
Introduction -- The stock market in early modern England -- Politics, warfare and finance -- Financial innovation and trade -- The bubble and the crash -- Reasons to invest in the South Sea Company -- Criticism and financial complexity -- The social history of the crash -- The real effects of...
Persistent link: https://www.econbiz.de/10008649827
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 banker, knew that a bubble was in progress and that it invested knowingly in the bubble; it was profitable to ride the bubble. Using a unique dataset on...
Persistent link: https://www.econbiz.de/10014073923
Introduction -- The stock market in early modern England -- Politics, warfare and finance -- Financial innovation and trade -- The bubble and the crash -- Reasons to invest in the South Sea Company -- Criticism and financial complexity -- The social history of the crash -- The real effects of...
Persistent link: https://www.econbiz.de/10014498232
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We introduce the concept of “negative bubbles” as the mirror image of standard financial bubbles, in which positive … feedback mechanisms may lead to transient accelerating price falls. To model these negative bubbles, we adapt the Johansen …-Ledoit-Sornette (JLS) model of rational expectation bubbles with a hazard rate describing the collective buying pressure of noise traders …
Persistent link: https://www.econbiz.de/10003979508