Quotation Fellner-Röhling, Gerlinde, Theissen, Erik. 2014. Short sale constraints, divergence of opinion and asset prices: Evidence from the laboratory. Journal of Economic Behavior and Organization. 101 113-127.


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Abstract

The overvaluation hypothesis (Miller, 1977) predicts that (a) stocks are overvalued in the presence of short selling restrictions and that (b) the overvaluation increases in the degree of divergence of opinion. We design an experiment that allows us to test these predictions in the laboratory. The results indicate that prices are higher with short selling constraints, but the overvaluation does not increase in the degree of divergence of opinion. We further find that trading volume is lower and quoted bid-ask spreads tend to be higher when short sale restrictions are imposed.

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Publication's profile

Status of publication Published
Affiliation External
Type of publication Journal article
Journal Journal of Economic Behavior and Organization
Citation Index SSCI
WU Journalrating 2009 A
WU-Journal-Rating new FIN-A, STRAT-A, VW-B, WH-A
Language English
Title Short sale constraints, divergence of opinion and asset prices: Evidence from the laboratory.
Volume 101
Year 2014
Page from 113
Page to 127
Reviewed? Y
DOI https://doi.org/10.1016/j.jebo.2014.02.010
Open Access N

Associations

People
Fellner-Röhling, Gerlinde (Details)
External
Theissen, Erik (Universität Mannheim, Germany)
Research areas (ÖSTAT Classification 'Statistik Austria')
5335 Political economic theory (Details)
5361 Financial management (Details)
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