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The paper studies liquidity provision by institutional investors using trade-level data. We find that hedge fund trades are a more important predictor of stock-level liquidity than mutual fund trades. However, hedge funds' liquidity provision is more exposed to financial conditions than that of...
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assumptions of expected utility theory and the basic rationality requirement of consistency with first-order stochastic dominance … consistent with the rationality criterion. In contrast, Chapters 3, 4 and 5 take a behavioral approach to decisions under … by a systematic bias instead of a private information advantage. Contradicting the rationality postulate and ruled out …
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