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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 …
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The efficient-market hypothesis (EMH) is one of the most important economic and financial hypotheses that have been tested over the past century. Due to many abnormal phenomena and conflicting evidence, otherwise known as anomalies against EMH, some academics have questioned whether EMH is...
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