Speculative Bubble Burst

Hyejin Cho (1)

1 CES - Centre d'économie de la Sorbonne

Central to market fundamentals are three ideas: (1) Nominal money (2) Dividend (3) Existing stock. In connection with the cumulative dividend stream criterion of fundamental and noise movement, the conception of sequentially stable Markov process is grounded on the theory of bubbles. This paper firstly embodies the origin of speculative bubble burst with overconfidence. Then, unique equilibrium with inertia is re-illuminated by the overconfidence.

Mots clés: externalities; speculative bubbles; heterogeneous beliefs; overconfidence; speculative bubble burst; equilibrium with inertia

Domaines: Economies et finances; Économie et finance quantitative [q-fin]

Hyejin Cho. Speculative Bubble Burst. 2015. ⟨hal-01184540⟩